Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38381 | ||
Entity Registrant Name | EVOLUS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-1385614 | ||
Entity Address, Address Line One | 520 Newport Center Dr., Suite 1200 | ||
Entity Address, City or Town | Newport Beach | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92660 | ||
City Area Code | 949 | ||
Local Phone Number | 284-4555 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value per share | ||
Trading Symbol | EOLS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Smaller Reporting Company | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 404.7 | ||
Entity Common Stock, Shares Outstanding | 57,943,622 | ||
Documents Incorporated by Reference | Portions of the registrant's definitive proxy statement (the “Proxy Statement”) for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III, Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2023 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity CIK | 0001570562 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Irvine, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 62,838 | $ 53,922 |
Accounts receivable, net | 30,529 | 22,448 |
Inventories | 10,998 | 18,852 |
Prepaid expenses | 5,700 | 3,902 |
Other current assets | 2,356 | 1,678 |
Total current assets | 112,421 | 100,802 |
Property and equipment, net | 2,087 | 2,616 |
Operating lease right-of-use assets | 5,763 | 1,947 |
Intangible assets, net | 47,110 | 48,597 |
Goodwill | 21,208 | 21,208 |
Other assets | 409 | 2,813 |
Total assets | 188,998 | 177,983 |
Current Liabilities | ||
Accounts payable | 4,271 | 8,935 |
Accrued expenses | 33,813 | 24,794 |
Accrued litigation settlement | 0 | 5,000 |
Operating lease liabilities | 1,377 | 1,320 |
Contingent royalty obligation payable to Evolus Founders | 8,830 | 6,460 |
Total current liabilities | 48,291 | 46,509 |
Operating lease liabilities | 4,810 | 1,224 |
Contingent royalty obligation payable to Evolus Founders | 36,200 | 39,850 |
Term loan, net of discount and issuance costs | 120,359 | 71,879 |
Deferred tax liability | 27 | 22 |
Total liabilities | 209,687 | 159,484 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity (deficit) | ||
Preferred Stock, $0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 0 | 0 |
Common Stock, $0.00001 par value; 100,000,000 shares authorized; 57,820,621 and 56,260,570 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 1 | 1 |
Additional paid-in capital | 538,716 | 516,129 |
Accumulated other comprehensive loss | (427) | (337) |
Accumulated deficit | (558,979) | (497,294) |
Total stockholders’ equity (deficit) | (20,689) | 18,499 |
Total liabilities and stockholders’ equity (deficit) | $ 188,998 | $ 177,983 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
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) | 57,820,621 | 56,260,570 |
Common stock, shares, outstanding (in shares) | 57,820,621 | 56,260,570 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue: | ||
Revenues | $ 202,085 | $ 148,616 |
Operating expenses: | ||
Cost, Product and Service [Extensible Enumeration] | Product revenue, net | Product revenue, net |
Product cost of sales (excludes amortization of intangible assets) | $ 61,559 | $ 55,887 |
Selling, general and administrative | 164,944 | 141,840 |
Research and development | 6,556 | 4,742 |
In-process research and development | 8,869 | 2,000 |
Revaluation of contingent royalty obligation payable to Evolus Founders | (4,257) | (5,755) |
Depreciation and amortization | 5,133 | 3,722 |
Total operating expenses | 251,318 | 213,946 |
Loss from operations | (49,233) | (65,330) |
Other income (expense): | ||
Interest income | 860 | 119 |
Interest expense | (13,832) | (9,097) |
Other income (expense), net | 696 | (9) |
Loss before income taxes: | (61,509) | (74,317) |
Income tax expense | 176 | 95 |
Net loss | (61,685) | (74,412) |
Other comprehensive loss: | ||
Unrealized loss, net of tax | (90) | (337) |
Comprehensive loss | $ (61,775) | $ (74,749) |
Net loss per share, basic (in dollars per share) | $ (1.08) | $ (1.33) |
Net loss per share, diluted (in dollars per share) | $ (1.08) | $ (1.33) |
Weighted-average shares outstanding used to compute basic net loss per share (in shares) | 56,918,721 | 56,065,297 |
Weighted-average shares outstanding used to compute diluted net loss per share (in shares) | 56,918,721 | 56,065,297 |
Product revenue, net | ||
Revenue: | ||
Revenues | $ 199,721 | $ 146,592 |
Service revenue | ||
Revenue: | ||
Revenues | $ 2,364 | $ 2,024 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 55,576,988 | ||||
Beginning balance at Dec. 31, 2021 | $ 81,876 | $ 1 | $ 504,757 | $ 0 | $ (422,882) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 683,582 | ||||
Issuance of common stock in connection with the incentive equity plan | 539 | 539 | |||
Stock-based compensation expense | 10,833 | 10,833 | |||
Net loss | (74,412) | ||||
Other comprehensive loss | $ (337) | (337) | |||
Ending balance (in shares) at Dec. 31, 2022 | 56,260,570 | 56,260,570 | |||
Ending balance at Dec. 31, 2022 | $ 18,499 | $ 1 | 516,129 | (337) | (497,294) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 950,051 | ||||
Issuance of common stock in connection with the incentive equity plan | 224 | 224 | |||
Issuance of common stock in connection with Symatese Europe Agreement (in shares) | 610,000 | ||||
Issuance of common stock in connection with Symatese Europe Agreement | 5,905 | 5,905 | |||
Stock-based compensation expense | 16,458 | 16,458 | |||
Net loss | (61,685) | ||||
Other comprehensive loss | $ (90) | (90) | |||
Ending balance (in shares) at Dec. 31, 2023 | 57,820,621 | 57,820,621 | |||
Ending balance at Dec. 31, 2023 | $ (20,689) | $ 1 | $ 538,716 | $ (427) | $ (558,979) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (61,685) | $ (74,412) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 5,133 | 3,722 |
Stock-based compensation | 16,458 | 10,833 |
Provision for bad debts | 1,440 | 1,598 |
Amortization of operating lease right-of-use assets | 734 | 775 |
Amortization of debt discount and issuance costs | 1,116 | 1,086 |
Deferred income taxes | 5 | (18) |
Revaluation of contingent royalty obligation to Evolus Founders | 4,257 | 5,755 |
Non-cash in-process research and development expense | 4,429 | 0 |
Changes in assets and liabilities: | ||
Inventories | 4,193 | (10,688) |
Accounts receivable | (9,521) | (9,389) |
Prepaid expenses | (1,798) | 1,180 |
Other assets | (864) | 4,854 |
Accounts payable | (1,017) | 968 |
Accrued expenses | 9,019 | (5,199) |
Accrued litigation settlement | (5,000) | (15,000) |
Operating lease liabilities | (907) | (977) |
Net cash used in operating activities | (34,008) | (84,912) |
Cash flows from investing activities | ||
Purchases of property and equipment | (473) | (1,618) |
Additions to capitalized software | (1,154) | (1,321) |
Net cash used in investing activities | (1,627) | (2,939) |
Cash flows from financing activities | ||
Payment of contingent royalty obligation to Evolus Founders | (5,537) | (4,185) |
Proceeds from issuance of long-term debt, net of discounts | 50,000 | 0 |
Payments for debt issuance costs | (46) | (500) |
Issuance of common stock in connection with incentive equity plan | 224 | 539 |
Net cash provided by (used in) financing activities | 44,641 | (4,146) |
Effect of exchange rates on cash | (90) | (337) |
Change in cash and cash equivalents | 8,916 | (92,334) |
Cash and cash equivalents, beginning of period | 53,922 | 146,256 |
Cash and cash equivalents, end of period | 62,838 | 53,922 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 12,708 | 7,999 |
Cash paid for income taxes | 117 | 76 |
Non-cash investing and financing information | ||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 4,550 | 0 |
Issuance of common stock in connection with Symatese Europe Agreement | $ 1,476 | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
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 global performance beauty company focused on delivering products in the cash-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 also approved by Health Canada in August 2018, the European Commission (“EC”) in September 2019, the Australian Therapeutics Good Administration (“TGA”) in January 2023, and Swissmedic in November 2023. 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, in Canada through a distribution partner in October 2019, and began its launch in Europe in September 2022. In 2023, the Company entered into an agreement to be the exclusive distributor of Evolysse™, a line of dermal fillers currently in late-stage development in the U.S. and Europe. Regulatory approval has been received for the Evolysse™ nasolabial fold product in Europe and the remaining three products are anticipated to be approved in late 2024. U.S. regulatory approval and commercial launch remains on track to begin in 2025 for the first two products with subsequent product launches for the remaining products in 2026 and 2027. The Company currently generates all of its net revenues from Jeuveau ® . The Company is headquartered in Newport Beach, California. Liquidity and Financial Condition The accompanying consolidated financial statements have been prepared on a basis that assumes that the Company will continue as a going concern. 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 and negative cash flows from operating activities and management expects operating losses and negative cash flows to continue for at least the next twelve months. The Company recorded net loss from operations of $49,233 and a total net loss of $61,685 for the twelve months ended December 31, 2023. The Company used cash of $34,008 from operations during the twelve months ended December 31, 2023, which included the final lump sum settlement payment of $5,000 to Medytox and Allergan, Inc. and Allergan Limited (together, “Allergan”) and an upfront payment of $4,441 to Symatese S.A.S. (“Symatese”). As of December 31, 2023, the Company had $62,838 in cash and cash equivalents and an accumulated deficit of $558,979. On March 8, 2023, the Company entered into an “at-the-market” sales agreement (the “ATM Sales Agreement”) and filed a shelf registration statement on Form S-3 and corresponding prospectus with the SEC to permit sales under the ATM Sales Agreement, which registration statement became effective on June 8, 2023. The Company has not sold any shares under the ATM Sales Agreement. See Note 9. Stockholders’ Equity for additional information. The Company believes that its current capital resources, which consist of cash and cash equivalents, will be sufficient to fund its operations through at least the next twelve months from the date the accompanying consolidated financial statements are issued based on its expected cash needs. The Company may need to raise additional capital to fund future operations or execute corporate development activities through entering into licensing or collaboration agreements with partners, 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 reduce its scope of operations to reduce the current rate of spending through actions such as reductions in staff and delaying, scaling back, or suspending certain research and development, sales and marketing programs and other operational goals. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Principles of Consolidation The Company’s consolidated financial statements include the Company’s accounts and those of the Company’s wholly-owned subsidiaries, Evolus Pharma Limited, Evolus International Ltd. and Evolus Pharma BV, and have been prepared in conformity with GAAP. All intercompany transactions have been eliminated. Use of Estimates Management is required to make certain estimates and assumptions in order to prepare consolidated financial statements in conformity with GAAP. Such estimates and assumptions affect the reported consolidated financial statements. These estimates include, but are not limited to net revenues, allowance for doubtful accounts, fair value measurements, inventory valuations and stock-based compensation, 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. Risks and Uncertainties The Company is party to an agreement (the “Daewoong Agreement”) with Daewoong Pharmaceutical Co. Ltd. (“Daewoong”), pursuant to which the Company received an exclusive distribution license to Jeuveau ® from Daewoong for aesthetic indications in the United States, European Union, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, New Zealand, 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 ® . See Note 8. Commitments and Contingencies and Note 10. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for additional information. The Company commercially launched Jeuveau ® in the United States in May 2019 and in Canada through its distribution partner in October 2019. The Company also began commercially launching Jeuveau ® in Europe in September 2022 and, as such, has a limited history of sales in those markets. If any previously granted approval to market and sell Jeuveau ® is retracted or the Company is denied approval or approval is delayed by regulators in any other jurisdictions, it may have a material adverse impact on the Company’s business and its consolidated financial statements. The Company is also 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 ® , third party litigation and challenges to its intellectual property, uncertainty of broad adoption of its product by aesthetic practitioners 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. Any disruption and volatility in the global capital markets, including caused by other events, such as public health crises, increased inflation and rising interest rates, and geopolitical conflicts, including the military conflict between Russia and Ukraine and the ongoing conflict in the Middle East, may increase the Company’s cost of capital and adversely affect its ability to access financing when and on terms that the Company desires. 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 the purposes of allocating resources and evaluating its financial performance. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and accounts receivable. Substantially all of the Company’s cash is held by financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. To date, the Company has not experienced any losses associated with this credit risk and continues to believe that this exposure is not significant. The Company invests, or plans to soon invest, its excess cash, in line with its investment policy, primarily in money market funds and debt instruments of U.S. government agencies. The Company’s accounts receivable is derived from customers located principally in the United States. Concentrations of credit risk with respect to trade receivables are limited due to the Company’s credit evaluation process. The Company does not typically require collateral from its customers. Credit losses historically have not been material. The Company continuously monitors customer payments and maintains an allowance for credit losses based on its assessment of various factors including historical experience, age of the receivable balances, and other current economic conditions or other factors that may affect customers’ ability to pay. 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. Inventories Inventories consist of finished goods held for sale and distribution. Cost is determined based on the estimated amount payable to the Company’s supplier after accounting for any reimbursement receivable pursuant to the Daewoong Settlement Agreement (as such term is defined, and such agreement is discussed, in Note 10. Medytox/Allergan Settlement Agreements and Daewoong Arrangement ), usin g 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. Product cost of sales, excluding amortization of intangible assets, consisted of the inventory cost and certain royalties on the sale of Jeuveau ® payable to Medytox and Allergan pursuant to the Medytox/Allergan Settlement Agreements (as such term is defined in Note 10. Medytox/Allergan Settlement Agreements and Daewoong Arrangement ). 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. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of approximately three 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 assesses goodwill for impairment annually and whenever events or changes in circumstances indicate that 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. 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 The distribution right intangible asset related to Jeuveau ® 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. A portion of the Symatese Europe Agreement represents the license and distribution right to Evolysse TM in Europe. The definite-lived distribution right intangible asset related to the Evolysse TM nasolabial fold product approved in Europe is amortized on a straight-line basis over the estimated useful life of 15 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 consolidated 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 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 consolidated 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. The incremental borrowing rate, the ROU asset and the lease liability are reevaluated upon a lease modification. 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 consolidated 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 December 31, 2023. Contingent Royalty Obligation Payable to Evolus Founders The Company was acquired by Strathspey Crown Holdings Group, LLC (“SCH”) in 2013 and subsequently by its subsidiary, Alphaeon Corporation (“Alphaeon”), 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 in February 2018, the Company assumed all of Alphaeon’s payment obligations under the Amended Stock Purchase Agreement. Payment obligations to the Evolus Founders consist of quarterly royalty payments of a low single digit percentage of net sales of Jeuveau ® . The obligations terminate in the second quarter of 2029, which is 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 owed 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 consolidated statements of operations and comprehensive loss and as a liability in the accompanying consolidated balance sheets. Long-Term Debt Long-term debt represents the debt balance with Pharmakon (see Note 6. Term Loans ), net of discount and issuance costs. Debt issuance costs represent legal, lender and consulting costs or fees associated with debt financing. Debt discounts and issuance costs are amortized into interest expense over the term of the debt. Foreign Currency Translation The financial statements of foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities are translated into U.S. dollars at current exchange rates as of balance sheet date, and income and expense items are translated into U.S. dollars using the average rates of exchange prevailing during the period. Gains and losses arising from translation are recorded in other comprehensive loss as a separate component of stockholders’ equity. Foreign currency gains or losses on transactions denominated in a currency other than the Company’s functional currency are recorded in other expenses, net in the accompanying consolidated statements of operations and comprehensive loss. Revenue Recognition 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 generates product revenue from the sale of Jeuveau ® in the United States and Europe, 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 administrative expenses in the accompanying consolidated 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. 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 discounts, such as 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, primarily for the volume based rebates, consumer loyalty programs and co-branded marketing programs. • 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. • Consumer Loyalty Program — The Company’s consumer loyalty program 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 represents a customer option that provides a material right and, accordingly, is a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the estimated material right reward (“Reward”) that the customer might redeem in the future. The standalone selling price of the Reward is measured based on estimated average selling price of Jeuveau ® at the time of redemption and the expected redemption rate by customers based on historical sales data. The portion of invoice price allocated to the Reward is initially recorded as deferred revenue. Subsequently, when customers redeem the Reward and the related product is delivered, the deferred revenue is recognized in net revenues at that time. • Co-Branded Marketing Programs — The Company offers eligible customers with a certain level of Jeuveau ® purchases to receive advertising co-branded with the Company. The co-branded advertising represents a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the advertisement. The standalone selling price of the advertisement is measured based on the estimated market value of similar advertisement adjusted for the customer’s portion of the advertisement. The portion of invoice price allocated to the advertisement is initially recorded as deferred revenue. Subsequently, when the advertisement airs, the deferred revenue is recognized in net revenues at that time. 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. 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 December 31, 2023 and 2022, all amounts included in accounts receivable, net on the accompanying consolidated balance sheets are related to contracts with customers. The Company did not have any contract assets nor unbilled receivables as of December 31, 2023 or 2022. 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 primarily under the rebate and deferred revenue associated with Rewards under the consumer loyalty program and co-branded marketing programs. The Company’s contract liabilities are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2023 and 2022, the accrued revenue contract liabilities, primarily related to volume-based rebates, consumer loyalty program and co-branded marketing programs, were $11,033 and $9,011, respectively, which were recorded in accrued expenses in the accompanying consolidated balance sheets. For the years ended December 31, 2023 and 2022, provisions for rebate, consumer loyalty programs and co-branded marketing programs were $32,511 and $22,759, respectively, which were offset by related payments, redemptions and adjustments of $30,489 and $21,682, respectively, which were recorded as adjustments to gross revenues in the accompanying consolidated statement of operations. During the years ended December 31, 2023 and 2022, the Company recognized $7,868 and $7,566, respectively, of revenue related to amounts included in contract liabilities at the beginning of the period and did not recognize any revenue related to changes in transaction prices regarding its contracts with customers from previous periods. 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. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and periodic evaluation of customers’ receivables balances using relevant available information, from internal and external sources, relating to past events, current conditions and forecasts. Historical credit loss experience provides the basis for estimation of expected credit losses and are adjusted as necessary using the relevant information available. The Company writes off accounts receivable balances when it is determined that there is no possibility of collection. As of December 31, 2023 and 2022, allowance for credit losses was $1,490 and $2,050, respectively. For the years ended December 31, 2023 and 2022, provision for bad debts was $1,440 and $1,598, respectively, and the write-off amount was $2,000 and $1,933, respectively. 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 consolidated 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. Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses include personnel-related costs, 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. In-process Research and Development Intangible assets acquired that are used for research and development, do not yet have regulatory approval for commercialization, and have no future alternative use are expensed as in-process research and development. Collaboration Agreement In June 2022, the Company entered into a License and Research Collaboration Agreement (the “Collaboration Agreement”) with a 3D printing company with biomaterial capabilities (the “Licensor”). Under the terms of the Collaboration Agreement, the Company was granted a license to the Licensor’s technology to develop and commercialize any aesthetic product or non-therapeutic product that is created through the use or practice of the Licensor’s patents. The Company paid $2,000 upon the signing of the Collaboration Agreement and has research funding, ongoing milestone and royalty payment obligations depending on the development plans, the success of such development and approval and commercialization of products. The upfront payment of $2,000 was recorded as in-process research and development expense. Symatese U.S. Agreement On May 9, 2023, the Company and Symatese, entered into a License, Supply and Distribution Agreement (the “Symatese U.S. Agreement”), pursuant to which Symatese granted to the Company an exclusive right to commercialize and distribute its five dermal filler product candidates, including the products referred to as: (i) Lift; (ii) Smooth; (iii) Sculpt; (iv) Lips; and (v) Eye (collectively, the “Products”) in the United States for use in the aesthetics and dermatological field of use. The Company also has the right of first negotiation to obtain a license from Symatese to commercialize and distribute any new products developed using the same technology as the Evolysse ™ line of dermal fillers. As consideration for the rights granted under the Symatese U.S. Agreement, the Company is required to make up to €16,200 in milestone payments to Symatese, including an initial payment of €4,100 within 30 days of execution of the Symatese U.S. Agreement, and additional annual payments of €1,600 in June 2025, €4,100 in June 2026, €3,200 in June 2027, and €3,200 in June 2028, in each case subject to three of the Products gaining approval prior to that date. In June 2023, the Company paid $4,441 as an upfront payment upon the signing of the Symatese U.S. Agreement and has developmental costs, ongoing milestone and royalty payment obligations. The Symatese U.S. Agreement is also subject to minimum purchase requirements and failure to meet such requirements may result in a reduction or termination of the Company’s exclusive rights, subject to certain exceptions. Additionally, the Company agreed to a specified cost-sharing agreement with Symatese related to the registration of the Lips and Eye Products with the FDA. The initial term of the Symatese U.S. Agreement is fifteen (15) years from the first FDA approval of a Product, with automatic renewals for successive five (5)-year terms subject to the terms of the Symatese U.S. Agreement. The upfront payment of $4,441 was recorded as in-process research and development expense in the twelve months ended December 31, 2023. Symatese Europe Agreement On December 20, 2023, the Company entered into a License, Supply and Distribution Agreement (the “Symatese Europe Agreement”), pursuant to which Symatese granted to us an exclusive right to commercialize and distribute four dermal filler product candidates, which are referred to as: (i) Lift; (ii) Smooth; (iii) Sculpt and (iv) Lips in 50 countries in Europe for use in the aesthetics and dermatological fields. In exchange for the rights granted under the Symatese Europe Agreement, the Company issued 610,000 shares of common stock and is required to pay two milestone payments: (i) €1,200 on the second anniversary of certain regulatory approvals, and (ii) €1,900 on the earlier of the third anniversary of certain regulatory approvals or following a year in which the Company achieves €25,000 in revenue in Europe. The Symatese Europe Agreement is also subject to minimum purchase requirements and failure to meet such requirements may result in a reduction or termination of the Company’s exclusive rights, subject to certain exceptions. The initial agreement is for a term of fifteen (15) years, with automatic year renewal provisions. Upon the receiving of regulatory approval for the Evolysse TM nasolabial fold product in Europe, the Company recorded $4,429 in in-process research and development expense and $1,476 in intangible assets in the twelve months ended December 31, 2023 for the stock issuance of 610,000 shares. The intangible assets of $1,476 represents the value of the approved nasolabial fold product in Europe and is amortized over its estimated useful life. Litigation Settlement In February 2021, upon entering into certain |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements 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 December 31, 2023 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 45,030 $ — $ — $ 45,030 As of December 31, 2022 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 46,310 $ — $ — $ 46,310 The Company did not transfer any assets or liabilities measured at fair value on a recurring basis between levels during the year ended December 31, 2023. 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 at the end of the second quarter of 2029, (ii) the discount rate, and (iii) the timing of payments. During the years ended December 31, 2023 and 2022, the Company utilized discount rates between 13.0% and 15.0%, reflecting changes in the Company’s risk profile. Net revenue projections are also updated to reflect changes in the timing of expected sales. Significant increases (decreases) in the discount rate and to the projected net revenues would result in a significantly lower (higher) fair value measurement, which could materially impact their fair value reported on the consolidated balance sheet. The following table shows a reconciliation of the beginning and ending fair value measurements of the contingent royalty obligation payable: Year Ended December 31, 2023 2022 Fair value, beginning of period $ 46,310 $ 44,740 Payments (5,537) (4,185) Change in fair value recorded in operating expenses 4,257 5,755 Fair value, end of period $ 45,030 $ 46,310 Other Financial Assets and Liabilities The Company’s financial instruments consist primarily of cash and cash equivalents, 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 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 December 31, 2023 and 2022, the fair value of long-term debt was $140,241 and $75,232, respectively. The fair value of operating lease liabilities as of December 31, 2023 and 2022 approximated their carrying value. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
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 rights 20 $ 60,552 $ (14,500) $ 46,052 Capitalized software 2 9,804 (8,746) 1,058 Intangible assets, net 70,356 (23,246) 47,110 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2023 $ 91,564 $ (23,246) $ 68,318 Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right 20 $ 59,076 $ (11,545) $ 47,531 Capitalized software 2 8,636 (7,570) 1,066 Intangible assets, net 67,712 (19,115) 48,597 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2022 $ 88,920 $ (19,115) $ 69,805 * 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 December 31, 2023 that are subject to amortization: Fiscal year 2024 $ 3,936 2025 3,201 2026 3,082 2027 3,054 2028 3,054 Thereafter 30,783 $ 47,110 Distribution rights represent the license and associated distribution rights to Jeuveau ® and Evolysse TM . For the year ended December 31, 2023, the Company capitalized $1,476 related to the license and distribution right to Evolysse TM nasolabial fold product in Europe, which is amortized on a straight-line basis over the estimated useful life of 15 years. For the years ended December 31, 2023 and 2022, the Company capitalized $1,168 and $1,322, respectively, related to costs of computer software developed for internal use. The software is amortized over a two-year period using the straight-line method. For the years ended December 31, 2023 and 2022, total intangible assets amortization expense of $4,072 and $3,350, respectively, was recorded within depreciation and amortization on the accompanying consolidated statements of operations and comprehensive loss. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of: Year Ended December 31, 2023 2022 Accrued royalties under the Medytox Settlement Agreement $ 3,657 $ 2,618 Accrued payroll and related benefits 13,433 7,454 Accrued revenue contract liabilities 11,033 9,011 Other accrued expenses 5,690 5,711 $ 33,813 $ 24,794 |
Term Loans
Term Loans | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Term Loans | Term Loans Pharmakon Term Loans On December 14, 2021, the Company entered into a loan agreement with Pharmakon. Pursuant to the terms of the agreement, Pharmakon agreed to make term loans to the Company in two tranches (the “Pharmakon Term Loans”). The first tranche of $75,000 was funded on December 29, 2021. On December 5, 2022, the Company entered into a Second Amendment to the loan agreement to extend the Company’s option to draw down the second tranche of $50,000 until December 31, 2023, and paid an amendment fee of $500 to Pharmakon. The Pharmakon Term Loans will mature on the sixth year On May 9, 2023, the Company entered into the Third Amendment to the loan agreement. Under the Third Amendment, Pharmakon agreed to advance the second tranche of $50,000 to the Company in two installments: (i) $25,000 advanced on May 31, 2023 and (ii) $25,000 advanced on December 15, 2023. The Third Amendment amended the principal payment terms to seven quarterly payments, each in an amount equal to 1/12 th of the outstanding principal amount of the Pharmakon Term Loans following the 51st-month anniversary of the closing date of the first tranche and the remaining principal balance of the Pharmakon Term Loans on the Maturity Date. The Third Amendment replaced the interest rates based on LIBOR with interest rates based on the Secured Overnight Financing Rate (“SOFR”) throughout the remaining term of the Pharmakon Term Loans. Initially, the Pharmakon Term Loans accrued interest at a per annum rate equal to the 3-month U.S. Dollar LIBOR rate (subject to a LIBOR rate floor of 1.0%) plus 8.5% per annum. Beginning May 2023, the Pharmakon Term Loans accrue interest at a per annum rate equal to the 3-month SOFR rate (subject to a SOFR rate floor of 1.0%) plus 8.5% per annum. The Company may elect to prepay all amounts, not less than $20,000, owed prior to the Maturity Date. Prepayments of the first tranche prior to the second anniversary of the closing date of the first tranche and prepayments of the second tranche prior to the second anniversary of the date on which the second tranche is drawn by the Company will be accompanied by a make whole amount equal to the sum of all interest that would have accrued through such second anniversary. Prepayments of the Pharmakon Term Loans will also be accompanied by a prepayment premium equal to the principal amount so prepaid multiplied by 3.0% if made prior to the third anniversary of the closing date of the first tranche, 2.0% if made on or after the third anniversary of the closing date of the first tranche but prior to the fourth anniversary of the closing date of the first tranche, and 1.0% if made on or after the fourth anniversary of the closing date of the first tranche but prior to the Maturity Date. If the Pharmakon Term Loans are accelerated following the occurrence of an event of default, including a material adverse change, the Company is required to immediately pay Pharmakon an amount equal to the sum of all outstanding principal, unpaid interest, and applicable make whole and prepayment premiums. The Pharmakon Term Loans are secured by substantially all of the Company’s assets. The Pharmakon Term Loans contain customary affirmative and restrictive covenants and representations and warranties. The affirmative covenants include, among others, certain information delivery requirements, obligations to maintain certain insurance, and certain notice requirements. The restrictive covenants include, among others, incurring certain additional indebtedness, consummating certain change in control transactions, or incurring any non- permitted lien or other encumbrance on the Company’s assets, without Pharmakon’s prior written consent. The Pharmakon Term Loans do not contain covenants requiring the Company to maintain a minimum cash threshold or minimum revenues or earnings. As of December 31, 2023, the Company was in compliance with its debt covenants. At the closing date of the first tranche, the Company incurred $3,042 and $3,263 in debt discounts and issuance costs related to the Pharmakon Term Loans, respectively. Debt discounts and issuance costs related to the entire Pharmakon 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 amortized into interest expense using the effective interest method. Debt discounts and issuance costs associated with the unfunded second 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. Upon the first draw of the second tranche in May 2023, debt discounts and issuance costs associated with the second tranche were reclassified from assets to debt as a deduction to the debt balance. As of December 31, 2023, the borrowings outstanding under the Pharmakon Term Loans were classified as long-term debt in the accompanying consolidated balance sheets. The overall effective interest rate was approximately 15.33% and 14.01% for the first and second tranche, respectively, as of December 31, 2023. As of December 31, 2023, the principal amounts of long-term debt maturities for each of the next five fiscal years are as follows: Fiscal year 2024 $ — 2025 — 2026 41,667 2027 83,333 Total principal payments 125,000 Unamortized debt discounts and issuance costs (4,641) Long term debt, net of discounts and issuance costs $ 120,359 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Operating Leases | Operating Leases On May 15, 2019, the Company entered into a five-year non-cancelable operating lease (the “Lease Agreement”), which was set to expire January 31, 2025, for its corporate headquarters in Newport Beach, California. Lease payments increase each year on February 1 based on an annual rent escalation clause. The Company has an option to extend the term of the lease for an additional 60 months, which was not recognized as part of its ROU assets and lease liabilities. On July 27, 2023, the Company entered into the First Amendment to the Lease Agreement (the “Lease Amendment”) for its corporate headquarters. The Lease Amendment includes a lease extension to January 31, 2030 with a three-month rent abatement period and additional office space. On July 27, 2023, the effective date of the Lease Amendment, the Company recognized additional ROU assets and lease liabilities in the amount of $4,550. The Company’s lease agreement does 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. The components of operating lease expense are as follows: Year Ended December 31, 2023 2022 Fixed operating lease expense $ 1,164 $ 1,084 Variable operating lease expense 183 91 $ 1,347 $ 1,175 The weighted-average remaining lease term and discount rate are as follows: As of December 31, 2023 2022 Weighted-average remaining lease term (years) 6.1 2.1 Weighted-average discount rate 11.0% 9.4% Operating lease expenses were included in the selling, general and administrative expenses in the accompanying consolidated 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 consolidated balance sheets. The following table presents the future minimum payments under the operating lease agreements with non-cancelable terms as of December 31, 2023: Fiscal year 2024 $ 1,377 2025 1,053 2026 1,451 2027 1,502 2028 1,555 Thereafter 1,744 Total operating lease payments 8,682 Less: imputed interest (2,495) Present value of operating lease liabilities $ 6,187 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments As of December 31, 2023, the Company has entered into commitments to purchase services and products for an aggregate amount of approximately $2,044. Certain minimum purchase commitments related to the purchase of Jeuveau ® and Evolysse TM are described below. License and Supply Agreement The Daewoong Agreement includes certain minimum annual purchases that 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 the licensed territories. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and the Company’s future market share in various jurisdictions. Symatese U.S. Agreement and Symatese Europe Agreement The Symatese U.S. Agreement and the Symatese Europe Agreement include certain minimum purchase requirements, and failure to meet such requirements may result in a reduction or termination of the Company’s exclusive rights, subject to certain exceptions. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and the Company’s future market share in various jurisdictions. Legal Proceedings Securities Class Action Lawsuit On October 16 and 28, 2020, two putative securities class action complaints were filed in the U.S. District Court for the Southern District of New York by Evolus shareholders Armin Malakouti and Clinton Cox, respectively, naming the Company and certain of its officers as defendants. The complaints assert violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts related to the Company’s acquisition of the right to sell Jeuveau ® , the complaint against the Company filed by Allergan and Medytox in the U.S. International Trade Commission related to Jeuveau ® (the “ITC Action”), and risks related to the ITC Action. The complaints assert a putative class period of February 1, 2019 to July 6, 2020. The court consolidated the actions on November 13, 2020, under the caption In re Evolus Inc. Securities Litigation , No. 1:20-cv-08647 (PGG). On September 17, 2021, the court appointed a lead plaintiff and lead counsel. On November 17, 2021, the lead plaintiff filed an amended class action complaint against the Company, three of its officers, and Alphaeon Corporation, the Company’s former majority shareholder. On January 18, 2022, the Company and the officer defendants served their motion to dismiss the amended complaint. On February 10, 2022, Alphaeon Corporation served its motion to dismiss the amended complaint. Both motions were fully briefed on June 16, 2022. The outcome of the legal proceeding is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss with respect to this matter. Shareholder Derivative Lawsuit On November 27, 2020 and December 2, 2020, two putative Evolus shareholders filed substantially similar shareholder derivative actions in the U.S. District Court for the Southern District of New York against certain of the Company’s officers and directors as defendants. The complaints alleged substantially similar facts as those in the Securities Class Action and assert claims for, among other things, breach of fiduciary duty, waste of corporate assets, unjust enrichment, and violations of Section 14(a) of the Exchange Act and for contribution under Sections 10(b) and 21(D) of the Exchange Act. On December 29, 2020, the plaintiffs filed a joint stipulation to consolidate their actions and on February 5, 2021, the court consolidated the action under the caption In re Evolus, Inc. Derivative Litigation , No. 1:20-cv-09986-PPG, and adjourned defendants’ time to move, answer or otherwise respond to the complaints. On September 20, 2021, the court so-ordered the parties’ stipulated stay of the consolidated derivative suit pending the court’s decision on the defendants’ motion to dismiss the Securities Class Action. It is possible that additional suits will be filed, or additional allegations will be made by stockholders, with respect to these same or similar or other matters and also naming the Company and/or its officers and directors as defendants. The Company believes that the complaints are without merit and intends to vigorously defend against it. However, the outcome of the legal proceeding is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss with respect to this matter. Books and Records Demand On March 5, 2021, the Company received a letter from a putative stockholder demanding inspection of specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law. The Company was subsequently informed that the stockholder sold his shares of the Company’s common stock. On October 13, 2021, the Company received a substantially similar demand to inspect specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law from another putative stockholder. The subject of the demand is substantially similar to the allegations in the putative securities class action and derivative complaints described above. The Company responded to the demand in December 2021. The outcome of this matter is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss with respect to this matter. Other Legal Matters The Company is, from time to time, 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. 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 December 31, 2023. Medytox/Allergan Settlement Agreements U.S. Settlement Agreement Effective February 18, 2021, the Company, Allergan and Medytox entered into a Settlement and License Agreement (the “U.S. Settlement Agreement”), pursuant to which, among other things: (i) Allergan and Medytox agreed to file a petition requesting the remedial orders related to the ITC Action be rescinded with respect to the Company; (ii) Medytox agreed to dismiss substantially similar litigation in California against the Company; (iii) the Company, on the one hand, and Medytox and Allergan, on the other hand, agreed to mutually release certain claims they may have against one another and their respective affiliates; (iv) Allergan and Medytox granted to the Company and its agents a license to manufacture and commercialize certain products identified in the U.S. Settlement Agreement, including Jeuveau ® (the “Licensed Products”), in the United States during the 21 month period that, pursuant to the ITC Action, the Company was restricted from, among other things, selling, marketing, or promoting such imported Jeuveau ® in the United States (the “Restricted Period”); (v) the Company agreed to pay to Allergan and Medytox $35,000 in multiple payments over two years, of which the Company paid the first cash payment of $15,000 in the third quarter of 2021, the second cash payment of $15,000 in the first quarter of 2022, and the final cash payment of $5,000 in the first quarter of 2023; and (vi) during the Restricted Period, the Company agreed to pay to Allergan and Medytox certain confidential royalties on the sale of Licensed Products, calculated on dollar amount per vial sold of Licensed Products by or on behalf of the Company in the United States. Royalties for sales during the Restricted Period ended on September 16, 2022. ROW Settlement Agreement Effective February 18, 2021, the Company and Medytox entered into a Settlement and License Agreement (the “ROW Settlement Agreement” and, together with the U.S. Settlement Agreement, the “Medytox/Allergan Settlement Agreements”), pursuant to which, among other things: (i) the Company and Medytox agreed to mutually release certain claims they may have against one another and their respective affiliates; (ii) Medytox granted to the Company and its agents a license to manufacture and commercialize the Licensed Products, in Canada, the European Union, Switzerland, member countries and cooperating countries of the European Economic Area, certain members of the Commonwealth of Independent States, South Africa, Australia and Japan (the “ROW Territories”) during the Restricted Period; (iii) Medytox granted to the Company and its agents a fully paid up license to manufacture and commercialize the Licensed Products in the ROW Territories and the United States from the end of the Restricted Period (the “Medytox License Period”); (iv) the Company and Medytox agreed to enter into the Share Issuance Agreement (as defined below) pursuant to which the Company issued 6,762,652 shares (the “Settlement Shares”) of the Company’s common stock, par value $0.00001 per share, to Medytox; (v) the Company and Medytox agreed to enter into the Registration Rights Agreement (as defined below), pursuant to which the Company granted certain registration rights to Medytox with respect to the Settlement Shares; (vi) during the Restricted Period that ended September 16, 2022, the Company agreed to pay Medytox a confidential low-double digit royalty on net sales of the Licensed Products sold by or on behalf of the Company in the ROW Territories; and (vii) during the Medytox License Period from September 17, 2022 to September 16, 2032, the Company agreed to pay Medytox a mid-single digit royalty percentage on net sales of the Licensed Products sold by or on behalf of the Company in the United States and the ROW Territories. Share Issuance Agreement In connection with the execution of the ROW Settlement Agreement, the Company and Medytox entered into a Share Issuance Agreement effective February 18, 2021 (the “Share Issuance Agreement”). Pursuant to the Share Issuance Agreement and subject to the terms and conditions set forth therein, among other things, the Company issued to Medytox the Settlement Shares to enter into the ROW Settlement Agreement and in consideration for Medytox’s representations, warranties, and other agreements set forth in the Share Issuance Agreement. The Settlement Shares are subject to contractual restrictions on transfer that, subject to certain limited exceptions such as transfers to affiliates, prevented Medytox from transferring any shares of common stock prior to February 16, 2022 or more than 25% of the shares it held prior to September 16, 2023 and, thereafter, prohibit Medytox from transferring more than 50% of the shares it holds prior to September 16, 2024 and more than 75% of the shares it holds prior to September 16, 2025, with such contractual restrictions terminating on September 16, 2025. Registration Rights Agreement In connection with the execution of the ROW Settlement Agreement, the Company and Medytox also entered into a Registration Rights Agreement effective February 18, 2021 (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, among other things, the Company agreed, after March 31, 2022, (i) to comply with certain requests by Medytox to register for sale, under the Securities Act, the Settlement Shares, and (ii) to include the Settlement Shares in certain registrations by the Company of its securities for sale under the Securities Act, to the extent requested by Medytox, in each case subject to certain customary conditions, exceptions and limitations as set forth in the Registration Rights Agreement. In addition, Medytox’s registration rights under the Registration Rights Agreement will terminate at such time that Medytox is able to sell all of the Settlement Shares over a three-month period, or less, pursuant to an exemption to registration under the Securities Act. As of September 30, 2023, Medytox’s registration rights under the Registration Rights Agreement have terminated. As of December 31, 2023, the Company accrued $3,657 for royalties under the Medytox/Allergan Settlement Agreements. As of December 31, 2022, the Company accrued $2,618 for royalties under the Medytox/Allergan Settlement Agreements and $5,000 of accrued litigation settlement expense. Daewoong Arrangement Daewoong Settlement Agreement On March 23, 2021, the Company and Daewoong entered into a Confidential Settlement and Release Agreement (the “Daewoong Settlement Agreement”), pursuant to which, among other things: (i) Daewoong agreed to (a) pay to the Company an amount equal to $25,500, which the Company received in April 2021, (b) pay certain legal fees incurred by the Company’s litigation counsel in connection with its defense of the ITC Action (including any appeal of the resulting remedial orders), (c) cancel all remaining milestone payments, totaling $10,500 in aggregate, and (d) reimburse the Company certain amounts (calculated on a dollar amount per vials sold basis in the United States) for sales of certain products with respect to which the Company is required to pay Medytox and Allergan royalties pursuant to the U.S. Settlement Agreement; and (ii) the Company agreed to (a) release, on behalf of itself and certain of its affiliates and representatives, certain claims they may have against Daewoong related to the allegations made in or the subject matter of the Medytox/Allergan Actions, or any orders, remedies and losses resulting from the Medytox/Allergan Actions, and (b) coordinate with Daewoong on certain matters related to the Medytox/Allergan Actions. Daewoong Agreement Amendment In connection with the execution of the Daewoong Settlement Agreement, on March 23, 2021, the Company and Daewoong also entered into the Third Amendment to the Supply Agreement (the “Daewoong Agreement Amendment”). Pursuant to the Daewoong Agreement Amendment, the parties amended the Daewoong Agreement to (i) expand the territory within which the Company may distribute Jeuveau ® to certain countries in Europe, (ii) reduce the period of time with respect to which the Company is required to deliver binding forecasts to Daewoong; (iii) introduce certain limitations on Daewoong’s ability to convert the Company’s exclusive license for certain territories to a non-exclusive license in the event the Company fails to meet certain minimum purchase requirements for such territory; (iv) adjust the minimum purchase requirements and reduce the transfer price per vial of Jeuveau ® applicable to various territories, (v) require that any Jeuveau ® supplied by Daewoong match certain shelf-life thresholds, and (vi) prohibit the Company from sharing certain confidential information of Daewoong with Medytox or its affiliates or representatives. Total inventory payments to Daewoong were $50,770 and $50,685 for the years ended December 31, 2023 and 2022, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders' 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 December 31, 2023, no shares of its preferred stock 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 December 31, 2023, 57,820,621 shares of its common stock were issued and outstanding. “At-the-market” Offerings of Common Stock On March 8, 2023, the Company entered into the ATM Sales Agreement with Leerink Partners LLC (formerly known as SVB Securities LLC) (the “Sales Agent”) pursuant to which shares of the Company’s common stock can be sold from time to time for aggregate gross proceeds of up to $50,000 (the “ATM Program”). Under the ATM Sales Agreement, the Sales Agent is entitled to compensation, at a commission rate equal to 3.0% of the gross proceeds from sales of the Company’s common shares under the ATM Program. The Company has not sold any shares under the ATM Sales Agreement. 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 non-statutory options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company’s 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, 2017 equal to 4.0% 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). On November 21, 2023 and 2022, an additional 2,287,649 and 2,249,863, shares, respectively, were reserved under the evergreen provision of the Plan. As of December 31, 2023, the Company had an aggregate of 2,919,942 shares of its common stock available for future issuance under the Plan. 2023 Inducement Incentive Plan In September 2023, the Company’s Board of Directors adopted the Company’s 2023 Inducement Incentive Plan (the “Inducement Plan”) in accordance with Nasdaq Listing Rule 5635(c)(4). The Company’s Inducement Plan provides for the grant of equity awards to selected individuals in connection with their commencing employment with the Company as an inducement material to their accepting such employment. The Board of Directors reserved 1,000,000 shares of common stock for issuance under the Inducement Plan. As of December 31, 2023, the Company had an aggregate of 718,060 shares of its common stock available for future issuance under the Inducement Plan. Inducement Grants From time to time, the Company has granted equity awards to its newly hired employees, including executives, in accordance with Nasdaq Listing Rule 5635(c)(4) and outside of the Company’s Plan and Inducement Plan. Such grants were made pursuant to a stand-alone nonstatutory stock option agreement and a stand-alone RSU agreement, which were approved by the Compensation Committee of the Board of Directors. Any shares underlying the inducement grants are not, upon forfeiture, cancellation or expiration, returned to a pool of shares reserved for future issuance. Stock Options Options to purchase the Company’s stock are granted at exercise prices based on the Company’s common stock price on the date of grant. The option grants generally vest over a one The significant assumptions used in the Black-Scholes option-pricing are as follows: • Expected Volatility. The expected volatility of common stock is estimated based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the stock options. • Expected Term. The expected term represents the period of time in which the options granted are expected to be outstanding. The Company estimates the expected term of options with consideration of vesting date, contractual term, and historical experience. The expected term of “plain vanilla” options is estimated based on the midpoint between the vesting date and the end of the contractual term under the simplified method permitted by the SEC implementation guidance. The weighted‑average expected term of the Company’s options is approximately six years. • Risk‑Free Rate. The risk‑free interest rate is selected based upon the implied yields in effect at the time of the option grant on U.S. Treasury zero‑coupon issues with a term approximately equal to the expected life of the option being valued. • Dividends. The Company does not anticipate paying cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield rate of zero. The assumptions used in determining the fair value of stock options granted were as follows: Year Ended December 31, 2023 2022 Volatility 83.6% 78.9% Risk-free interest rate 3.7% 2.1% Expected life (years) 6.21 6.19 Dividend yield rate —% —% A summary of stock option activity for the year ended December 31, 2023 and 2022, is presented below: Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Per Share Terms (Years) Value Outstanding as of December 31, 2021 3,922,286 $ 11.23 7.10 $ 455 Granted 1,773,043 6.82 Exercised (53,098) 10.08 Cancelled/forfeited (872,710) 13.19 Outstanding as of December 31, 2022 4,769,521 $ 9.24 7.02 $ 2,911 Granted 1,406,922 10.54 Exercised (39,823) 5.59 Cancelled/forfeited (383,154) 11.14 Outstanding as of December 31, 2023 5,753,466 $ 9.46 6.69 $ 11,111 Exercisable as of December 31, 2023 3,370,875 $ 9.79 5.32 $ 6,815 The aggregate intrinsic value of outstanding and exercisable options represents the excess of the fair market value of the Company’s common stock over the exercise price of underlying options as of December 31, 2023 and 2022. Restricted Stock Units RSU grants generally vest over a one A summary of RSU activity for the year ended December 31, 2023 and 2022, is presented below: Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding as of December 31, 2021 1,926,467 $ 8.06 Granted 1,890,533 7.00 Vested (630,484) 8.02 Forfeited (490,059) 7.21 Outstanding as of December 31, 2022 2,696,457 $ 7.48 Granted 1,746,415 10.27 Vested (851,759) 7.33 Forfeited (310,068) 8.79 Outstanding as of December 31, 2023 3,281,045 $ 8.88 Performance Restricted Stock Units In January 2023, the Company’s Board of Directors granted 292,349 shares of performance restricted stock units (“PRSUs”) to certain executive officers under the Plan. The PRSU awards function in the same manner as restricted stock units except that vesting terms are based on achievement of certain pre-established performance measures. A summary of PRSU activity for the year ended December 31, 2023 and 2022, is presented below: Performance Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding as of December 31, 2022 — $ — Granted 292,349 10.25 Vested (58,469) 10.25 Forfeited — — Outstanding as of December 31, 2023 233,880 $ 10.25 CEO Performance Award For RSUs granted to employees that vest based on market conditions, such as the trading price of the Company’s common stock exceeding certain price targets, the Company uses a Monte Carlo Simulation in estimating the fair value at grant date and recognizes compensation cost over the requisite service period. On May 8, 2023, the Company granted the Company’s Chief Executive Officer (“CEO”) an award of 560,000 PRSUs under the Plan. The stock units subject to the award are subject to both performance- and time-based vesting requirements. 40% of the stock units subject to the award are eligible to vest if the average of the closing prices for a share of the Company’s common stock over a period of 20 consecutive trading days is $30 or more and an additional 60% of the stock units subject to the award are eligible to vest if the average of the closing prices for a share of the Company’s common stock over a period of 20 consecutive trading days is $50 or more, in each case within five years after the grant of the award and while the CEO is employed by the Company (or, in certain circumstances, within 20 days following a termination of his employment). Any stock units that become eligible to vest based on stock price will vest, subject to the CEO’s continued service, over the four-year period after the grant date. The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was $3,774. Compensation expense is recorded if the service condition is met regardless of whether the market condition is satisfied. The following table summarizes stock-based compensation expense: Year Ended December 31, 2023 2022 Selling, general and administrative $ 15,564 $ 10,565 Research and development 894 268 Total stock-based compensation expense $ 16,458 $ 10,833 |
Medytox_Allergan Settlement Agr
Medytox/Allergan Settlement Agreements and Daewoong Arrangement | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Medytox/Allergan Settlement Agreements and Daewoong Arrangement | Commitments and Contingencies Purchase Commitments As of December 31, 2023, the Company has entered into commitments to purchase services and products for an aggregate amount of approximately $2,044. Certain minimum purchase commitments related to the purchase of Jeuveau ® and Evolysse TM are described below. License and Supply Agreement The Daewoong Agreement includes certain minimum annual purchases that 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 the licensed territories. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and the Company’s future market share in various jurisdictions. Symatese U.S. Agreement and Symatese Europe Agreement The Symatese U.S. Agreement and the Symatese Europe Agreement include certain minimum purchase requirements, and failure to meet such requirements may result in a reduction or termination of the Company’s exclusive rights, subject to certain exceptions. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and the Company’s future market share in various jurisdictions. Legal Proceedings Securities Class Action Lawsuit On October 16 and 28, 2020, two putative securities class action complaints were filed in the U.S. District Court for the Southern District of New York by Evolus shareholders Armin Malakouti and Clinton Cox, respectively, naming the Company and certain of its officers as defendants. The complaints assert violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts related to the Company’s acquisition of the right to sell Jeuveau ® , the complaint against the Company filed by Allergan and Medytox in the U.S. International Trade Commission related to Jeuveau ® (the “ITC Action”), and risks related to the ITC Action. The complaints assert a putative class period of February 1, 2019 to July 6, 2020. The court consolidated the actions on November 13, 2020, under the caption In re Evolus Inc. Securities Litigation , No. 1:20-cv-08647 (PGG). On September 17, 2021, the court appointed a lead plaintiff and lead counsel. On November 17, 2021, the lead plaintiff filed an amended class action complaint against the Company, three of its officers, and Alphaeon Corporation, the Company’s former majority shareholder. On January 18, 2022, the Company and the officer defendants served their motion to dismiss the amended complaint. On February 10, 2022, Alphaeon Corporation served its motion to dismiss the amended complaint. Both motions were fully briefed on June 16, 2022. The outcome of the legal proceeding is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss with respect to this matter. Shareholder Derivative Lawsuit On November 27, 2020 and December 2, 2020, two putative Evolus shareholders filed substantially similar shareholder derivative actions in the U.S. District Court for the Southern District of New York against certain of the Company’s officers and directors as defendants. The complaints alleged substantially similar facts as those in the Securities Class Action and assert claims for, among other things, breach of fiduciary duty, waste of corporate assets, unjust enrichment, and violations of Section 14(a) of the Exchange Act and for contribution under Sections 10(b) and 21(D) of the Exchange Act. On December 29, 2020, the plaintiffs filed a joint stipulation to consolidate their actions and on February 5, 2021, the court consolidated the action under the caption In re Evolus, Inc. Derivative Litigation , No. 1:20-cv-09986-PPG, and adjourned defendants’ time to move, answer or otherwise respond to the complaints. On September 20, 2021, the court so-ordered the parties’ stipulated stay of the consolidated derivative suit pending the court’s decision on the defendants’ motion to dismiss the Securities Class Action. It is possible that additional suits will be filed, or additional allegations will be made by stockholders, with respect to these same or similar or other matters and also naming the Company and/or its officers and directors as defendants. The Company believes that the complaints are without merit and intends to vigorously defend against it. However, the outcome of the legal proceeding is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss with respect to this matter. Books and Records Demand On March 5, 2021, the Company received a letter from a putative stockholder demanding inspection of specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law. The Company was subsequently informed that the stockholder sold his shares of the Company’s common stock. On October 13, 2021, the Company received a substantially similar demand to inspect specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law from another putative stockholder. The subject of the demand is substantially similar to the allegations in the putative securities class action and derivative complaints described above. The Company responded to the demand in December 2021. The outcome of this matter is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss with respect to this matter. Other Legal Matters The Company is, from time to time, 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. 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 December 31, 2023. Medytox/Allergan Settlement Agreements U.S. Settlement Agreement Effective February 18, 2021, the Company, Allergan and Medytox entered into a Settlement and License Agreement (the “U.S. Settlement Agreement”), pursuant to which, among other things: (i) Allergan and Medytox agreed to file a petition requesting the remedial orders related to the ITC Action be rescinded with respect to the Company; (ii) Medytox agreed to dismiss substantially similar litigation in California against the Company; (iii) the Company, on the one hand, and Medytox and Allergan, on the other hand, agreed to mutually release certain claims they may have against one another and their respective affiliates; (iv) Allergan and Medytox granted to the Company and its agents a license to manufacture and commercialize certain products identified in the U.S. Settlement Agreement, including Jeuveau ® (the “Licensed Products”), in the United States during the 21 month period that, pursuant to the ITC Action, the Company was restricted from, among other things, selling, marketing, or promoting such imported Jeuveau ® in the United States (the “Restricted Period”); (v) the Company agreed to pay to Allergan and Medytox $35,000 in multiple payments over two years, of which the Company paid the first cash payment of $15,000 in the third quarter of 2021, the second cash payment of $15,000 in the first quarter of 2022, and the final cash payment of $5,000 in the first quarter of 2023; and (vi) during the Restricted Period, the Company agreed to pay to Allergan and Medytox certain confidential royalties on the sale of Licensed Products, calculated on dollar amount per vial sold of Licensed Products by or on behalf of the Company in the United States. Royalties for sales during the Restricted Period ended on September 16, 2022. ROW Settlement Agreement Effective February 18, 2021, the Company and Medytox entered into a Settlement and License Agreement (the “ROW Settlement Agreement” and, together with the U.S. Settlement Agreement, the “Medytox/Allergan Settlement Agreements”), pursuant to which, among other things: (i) the Company and Medytox agreed to mutually release certain claims they may have against one another and their respective affiliates; (ii) Medytox granted to the Company and its agents a license to manufacture and commercialize the Licensed Products, in Canada, the European Union, Switzerland, member countries and cooperating countries of the European Economic Area, certain members of the Commonwealth of Independent States, South Africa, Australia and Japan (the “ROW Territories”) during the Restricted Period; (iii) Medytox granted to the Company and its agents a fully paid up license to manufacture and commercialize the Licensed Products in the ROW Territories and the United States from the end of the Restricted Period (the “Medytox License Period”); (iv) the Company and Medytox agreed to enter into the Share Issuance Agreement (as defined below) pursuant to which the Company issued 6,762,652 shares (the “Settlement Shares”) of the Company’s common stock, par value $0.00001 per share, to Medytox; (v) the Company and Medytox agreed to enter into the Registration Rights Agreement (as defined below), pursuant to which the Company granted certain registration rights to Medytox with respect to the Settlement Shares; (vi) during the Restricted Period that ended September 16, 2022, the Company agreed to pay Medytox a confidential low-double digit royalty on net sales of the Licensed Products sold by or on behalf of the Company in the ROW Territories; and (vii) during the Medytox License Period from September 17, 2022 to September 16, 2032, the Company agreed to pay Medytox a mid-single digit royalty percentage on net sales of the Licensed Products sold by or on behalf of the Company in the United States and the ROW Territories. Share Issuance Agreement In connection with the execution of the ROW Settlement Agreement, the Company and Medytox entered into a Share Issuance Agreement effective February 18, 2021 (the “Share Issuance Agreement”). Pursuant to the Share Issuance Agreement and subject to the terms and conditions set forth therein, among other things, the Company issued to Medytox the Settlement Shares to enter into the ROW Settlement Agreement and in consideration for Medytox’s representations, warranties, and other agreements set forth in the Share Issuance Agreement. The Settlement Shares are subject to contractual restrictions on transfer that, subject to certain limited exceptions such as transfers to affiliates, prevented Medytox from transferring any shares of common stock prior to February 16, 2022 or more than 25% of the shares it held prior to September 16, 2023 and, thereafter, prohibit Medytox from transferring more than 50% of the shares it holds prior to September 16, 2024 and more than 75% of the shares it holds prior to September 16, 2025, with such contractual restrictions terminating on September 16, 2025. Registration Rights Agreement In connection with the execution of the ROW Settlement Agreement, the Company and Medytox also entered into a Registration Rights Agreement effective February 18, 2021 (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, among other things, the Company agreed, after March 31, 2022, (i) to comply with certain requests by Medytox to register for sale, under the Securities Act, the Settlement Shares, and (ii) to include the Settlement Shares in certain registrations by the Company of its securities for sale under the Securities Act, to the extent requested by Medytox, in each case subject to certain customary conditions, exceptions and limitations as set forth in the Registration Rights Agreement. In addition, Medytox’s registration rights under the Registration Rights Agreement will terminate at such time that Medytox is able to sell all of the Settlement Shares over a three-month period, or less, pursuant to an exemption to registration under the Securities Act. As of September 30, 2023, Medytox’s registration rights under the Registration Rights Agreement have terminated. As of December 31, 2023, the Company accrued $3,657 for royalties under the Medytox/Allergan Settlement Agreements. As of December 31, 2022, the Company accrued $2,618 for royalties under the Medytox/Allergan Settlement Agreements and $5,000 of accrued litigation settlement expense. Daewoong Arrangement Daewoong Settlement Agreement On March 23, 2021, the Company and Daewoong entered into a Confidential Settlement and Release Agreement (the “Daewoong Settlement Agreement”), pursuant to which, among other things: (i) Daewoong agreed to (a) pay to the Company an amount equal to $25,500, which the Company received in April 2021, (b) pay certain legal fees incurred by the Company’s litigation counsel in connection with its defense of the ITC Action (including any appeal of the resulting remedial orders), (c) cancel all remaining milestone payments, totaling $10,500 in aggregate, and (d) reimburse the Company certain amounts (calculated on a dollar amount per vials sold basis in the United States) for sales of certain products with respect to which the Company is required to pay Medytox and Allergan royalties pursuant to the U.S. Settlement Agreement; and (ii) the Company agreed to (a) release, on behalf of itself and certain of its affiliates and representatives, certain claims they may have against Daewoong related to the allegations made in or the subject matter of the Medytox/Allergan Actions, or any orders, remedies and losses resulting from the Medytox/Allergan Actions, and (b) coordinate with Daewoong on certain matters related to the Medytox/Allergan Actions. Daewoong Agreement Amendment In connection with the execution of the Daewoong Settlement Agreement, on March 23, 2021, the Company and Daewoong also entered into the Third Amendment to the Supply Agreement (the “Daewoong Agreement Amendment”). Pursuant to the Daewoong Agreement Amendment, the parties amended the Daewoong Agreement to (i) expand the territory within which the Company may distribute Jeuveau ® to certain countries in Europe, (ii) reduce the period of time with respect to which the Company is required to deliver binding forecasts to Daewoong; (iii) introduce certain limitations on Daewoong’s ability to convert the Company’s exclusive license for certain territories to a non-exclusive license in the event the Company fails to meet certain minimum purchase requirements for such territory; (iv) adjust the minimum purchase requirements and reduce the transfer price per vial of Jeuveau ® applicable to various territories, (v) require that any Jeuveau ® supplied by Daewoong match certain shelf-life thresholds, and (vi) prohibit the Company from sharing certain confidential information of Daewoong with Medytox or its affiliates or representatives. Total inventory payments to Daewoong were $50,770 and $50,685 for the years ended December 31, 2023 and 2022, respectively. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company maintains a defined contribution 401(k) plan covering substantially all employees. Matching contributions totaled $1,582 and $773 for the years ended December 31, 2023 and 2022, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s loss before income taxes was generated from its U.S. operations and foreign operations as follows: Year Ended December 31, 2023 2022 United States $ 51,004 $ 66,103 Foreign 10,505 8,214 Loss before taxes $ 61,509 $ 74,317 The following table shows the expense (benefit) for income taxes: Year Ended December 31, 2023 2022 Current provision: Federal $ — $ — State 138 113 Foreign 33 — Total current provision $ 171 $ 113 Deferred provision (benefit): Federal $ 1 $ (8) State 4 (10) Foreign — — Total deferred (benefit) provision $ 5 $ (18) Total provision for income taxes $ 176 $ 95 As of December 31, 2023, the Company has federal net operating loss (“NOL”) carryforwards of $317,668, of which $72,579 will begin to expire in 2034. The federal NOLs generated in 2018 and in the subsequent years in the amount of $245,089 have an indefinite carryforward period. As of December 31, 2023, the Company has state NOL carryforwards of $227,347, which will begin to expire in 2024. As of December 31, 2023, the Company has federal research and development (“R&D”) credit carryforwards of $2,929, which will begin to expire in 2034. The Company also has California R&D credit carryforwards of $2,918, which has an indefinite carryforward period. The NOL and the R&D credit carryforwards generated by the Company in tax years ended February 11, 2018 and prior have been included in the consolidated and unitary income tax returns of Alphaeon Corporation (“Alphaeon”). After the Company left Alphaeon consolidated and unitary income tax group on February 11, 2018, the Company files its own standalone income tax returns. Deferred tax assets in the accompanying consolidated financial statements reflect the Company's standalone tax attributes that are reportable on its own income tax returns. In general, if a company experiences a greater than 50 percentage point aggregate change in ownership of certain significant stockholders over a three-year period, utilization of its pre-change NOL carryforwards and R&D credit carryforwards is subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar state laws. The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change, subject to certain adjustments, by the applicable long-term tax-exempt rate. The annual limitations may result in the expiration of NOL and R&D credit carryforwards before utilization and may be material. The Company has started but has not completed an analysis to determine whether its NOL and R&D credits generated through December 31, 2023 are likely to be limited by Section 382 and 383. The Company anticipates that an ownership change as defined under Section 382 may have occurred and that the resulting limitation would significantly reduce the Company’s ability to utilize its NOL and R&D credit carryforwards before they expire. Additionally, future ownership changes under Section 382 and 383 may also limit the Company's ability to fully utilize any remaining tax benefits. The Company’s net deferred income tax assets have been offset by a valuation allowance. Therefore, any resulting reduction to the Company’s NOL and R&D credit carryforwards once the analysis is complete will be offset by a corresponding reduction of the valuation allowance and there would be no impact on the Company’s consolidated balance sheet, statement of operations, or cash flows. The components of deferred tax assets and liabilities were as follows: As of December 31, 2023 2022 Deferred income tax assets: Net operating losses $ 83,257 $ 80,494 Stock compensation 5,442 5,168 Research and Development credits 2,617 2,617 Accrued compensation 5,955 4,675 Operating lease liabilities 1,567 646 Accrued legal settlement 17,674 19,203 R&E Capitalization 3,415 1,100 Fixed asset depreciation 183 — Other, net 5,126 2,135 Valuation allowance (116,073) (103,695) Total deferred income tax assets 9,163 12,343 Deferred income tax liabilities: Intangible amortization (7,730) (11,525) Operating lease right-of-use assets (1,460) (495) Fixed asset depreciation — (345) Total deferred income tax liabilities (9,190) (12,365) Net deferred income taxes $ (27) $ (22) A reconciliation of the difference between the provision (benefit) for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows: Year Ended December 31, 2023 2022 Income tax at statutory rate $ (12,917) $ (15,607) State income taxes, net of Federal benefit (1,981) (2,673) Revaluation of contingent royalty obligation 1,078 1,462 Meals and entertainment 385 358 Change in state tax rate 218 (3) Officers' compensation 793 (1,529) Foreign Rate Differential 222 10 Stock compensation 449 299 Other, net (449) (391) Valuation allowance 12,378 18,169 Income tax provision (benefit) $ 176 $ 95 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2023 2022 Beginning balance $ 2,924 $ 2,924 Increases to prior year tax positions — — Increases to current year tax positions — — Ending balance $ 2,924 $ 2,924 The Company has considered the amounts and probabilities of the outcomes that can be realized upon ultimate settlement with the tax authorities and determined unrecognized tax benefits primarily related to credits should be established as noted in the summary rollforward above. The Company’s effective income tax rate would not be impacted if the unrecognized tax benefits are recognized. Additional amounts in the summary rollforward could impact the Company’s effective tax rate if it did not maintain a full valuation allowance on its net deferred tax assets. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (61,685) | $ (74,412) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
Principles of Consolidation | Principles of Consolidation The Company’s consolidated financial statements include the Company’s accounts and those of the Company’s wholly-owned subsidiaries, Evolus Pharma Limited, Evolus International Ltd. and Evolus Pharma BV, and have been prepared in conformity with GAAP. All intercompany transactions have been eliminated. |
Use of Estimates | Use of Estimates Management is required to make certain estimates and assumptions in order to prepare consolidated financial statements in conformity with GAAP. Such estimates and assumptions affect the reported consolidated financial statements. These estimates include, but are not limited to net revenues, allowance for doubtful accounts, fair value measurements, inventory valuations and stock-based compensation, 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. |
Risks and Uncertainties and Concentration of Credit Risk | Risks and Uncertainties The Company is party to an agreement (the “Daewoong Agreement”) with Daewoong Pharmaceutical Co. Ltd. (“Daewoong”), pursuant to which the Company received an exclusive distribution license to Jeuveau ® from Daewoong for aesthetic indications in the United States, European Union, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, New Zealand, 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 ® . See Note 8. Commitments and Contingencies and Note 10. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for additional information. The Company commercially launched Jeuveau ® in the United States in May 2019 and in Canada through its distribution partner in October 2019. The Company also began commercially launching Jeuveau ® in Europe in September 2022 and, as such, has a limited history of sales in those markets. If any previously granted approval to market and sell Jeuveau ® is retracted or the Company is denied approval or approval is delayed by regulators in any other jurisdictions, it may have a material adverse impact on the Company’s business and its consolidated financial statements. The Company is also 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 ® , third party litigation and challenges to its intellectual property, uncertainty of broad adoption of its product by aesthetic practitioners 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. Any disruption and volatility in the global capital markets, including caused by other events, such as public health crises, increased inflation and rising interest rates, and geopolitical conflicts, including the military conflict between Russia and Ukraine and the ongoing conflict in the Middle East, may increase the Company’s cost of capital and adversely affect its ability to access financing when and on terms that the Company desires. Any of these events could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and accounts receivable. Substantially all of the Company’s cash is held by financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. To date, the Company has not experienced any losses associated with this credit risk and continues to believe that this exposure is not significant. The Company invests, or plans to soon invest, its excess cash, in line with its investment policy, primarily in money market funds and debt instruments of U.S. government agencies. The Company’s accounts receivable is derived from customers located principally in the United States. Concentrations of credit risk with respect to trade receivables are limited due to the Company’s credit evaluation process. The Company does not typically require collateral from its customers. Credit losses historically have not been material. The Company continuously monitors customer payments and maintains an allowance for credit losses based on its assessment of various factors including historical experience, age of the receivable balances, and other current economic conditions or other factors that may affect customers’ ability to pay. |
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 the 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. |
Inventories | Inventories Inventories consist of finished goods held for sale and distribution. Cost is determined based on the estimated amount payable to the Company’s supplier after accounting for any reimbursement receivable pursuant to the Daewoong Settlement Agreement (as such term is defined, and such agreement is discussed, in Note 10. Medytox/Allergan Settlement Agreements and Daewoong Arrangement ), usin g 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. Product cost of sales, excluding amortization of intangible assets, consisted of the inventory cost and certain royalties on the sale of Jeuveau ® payable to Medytox and Allergan pursuant to the Medytox/Allergan Settlement Agreements (as such term is defined in Note 10. Medytox/Allergan Settlement Agreements and Daewoong Arrangement ). |
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. |
Property and Equipment | Property and Equipment three |
Goodwill | Goodwill |
Intangible Assets | Intangible Assets The distribution right intangible asset related to Jeuveau ® 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. A portion of the Symatese Europe Agreement represents the license and distribution right to Evolysse TM in Europe. The definite-lived distribution right intangible asset related to the Evolysse TM nasolabial fold product approved in Europe is amortized on a straight-line basis over the estimated useful life of 15 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 consolidated 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. |
Leases | Leases 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 consolidated 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. The incremental borrowing rate, the ROU asset and the lease liability are reevaluated upon a lease modification. 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 consolidated 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 December 31, 2023. |
Contingent Royalty Obligation Payable and Promissory Note Payable to the Evolus Founders | Contingent Royalty Obligation Payable to Evolus Founders The Company was acquired by Strathspey Crown Holdings Group, LLC (“SCH”) in 2013 and subsequently by its subsidiary, Alphaeon Corporation (“Alphaeon”), 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 in February 2018, the Company assumed all of Alphaeon’s payment obligations under the Amended Stock Purchase Agreement. Payment obligations to the Evolus Founders consist of quarterly royalty payments of a low single digit percentage of net sales of Jeuveau ® . The obligations terminate in the second quarter of 2029, which is 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 owed 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 consolidated statements of operations and comprehensive loss and as a liability in the accompanying consolidated balance sheets. |
Long-Term Debt | Long-Term Debt Long-term debt represents the debt balance with Pharmakon (see Note 6. Term Loans ), net of discount and issuance costs. Debt issuance costs represent legal, lender and consulting costs or fees associated with debt financing. Debt discounts and issuance costs are amortized into interest expense over the term of the debt. |
Foreign Currency Translation | Foreign Currency Translation The financial statements of foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities are translated into U.S. dollars at current exchange rates as of balance sheet date, and income and expense items are translated into U.S. dollars using the average rates of exchange prevailing during the period. Gains and losses arising from translation are recorded in other comprehensive loss as a separate component of stockholders’ equity. Foreign currency gains or losses on transactions denominated in a currency other than the Company’s functional currency are recorded in other expenses, net in the accompanying consolidated statements of operations and comprehensive loss. |
Revenue Recognition | Revenue Recognition 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 generates product revenue from the sale of Jeuveau ® in the United States and Europe, 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 administrative expenses in the accompanying consolidated 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. 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 discounts, such as 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, primarily for the volume based rebates, consumer loyalty programs and co-branded marketing programs. • 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. • Consumer Loyalty Program — The Company’s consumer loyalty program 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 represents a customer option that provides a material right and, accordingly, is a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the estimated material right reward (“Reward”) that the customer might redeem in the future. The standalone selling price of the Reward is measured based on estimated average selling price of Jeuveau ® at the time of redemption and the expected redemption rate by customers based on historical sales data. The portion of invoice price allocated to the Reward is initially recorded as deferred revenue. Subsequently, when customers redeem the Reward and the related product is delivered, the deferred revenue is recognized in net revenues at that time. • Co-Branded Marketing Programs — The Company offers eligible customers with a certain level of Jeuveau ® purchases to receive advertising co-branded with the Company. The co-branded advertising represents a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the advertisement. The standalone selling price of the advertisement is measured based on the estimated market value of similar advertisement adjusted for the customer’s portion of the advertisement. The portion of invoice price allocated to the advertisement is initially recorded as deferred revenue. Subsequently, when the advertisement airs, the deferred revenue is recognized in net revenues at that time. 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. 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 December 31, 2023 and 2022, all amounts included in accounts receivable, net on the accompanying consolidated balance sheets are related to contracts with customers. The Company did not have any contract assets nor unbilled receivables as of December 31, 2023 or 2022. 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 primarily under the rebate and deferred revenue associated with Rewards under the consumer loyalty program and co-branded marketing programs. The Company’s contract liabilities are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2023 and 2022, the accrued revenue contract liabilities, primarily related to volume-based rebates, consumer loyalty program and co-branded marketing programs, were $11,033 and $9,011, respectively, which were recorded in accrued expenses in the accompanying consolidated balance sheets. For the years ended December 31, 2023 and 2022, provisions for rebate, consumer loyalty programs and co-branded marketing programs were $32,511 and $22,759, respectively, which were offset by related payments, redemptions and adjustments of $30,489 and $21,682, respectively, which were recorded as adjustments to gross revenues in the accompanying consolidated statement of operations. During the years ended December 31, 2023 and 2022, the Company recognized $7,868 and $7,566, respectively, of revenue related to amounts included in contract liabilities at the beginning of the period and did not recognize any revenue related to changes in transaction prices regarding its contracts with customers from previous periods. 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. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and periodic evaluation of customers’ receivables balances using relevant available information, from internal and external sources, relating to past events, current conditions and forecasts. Historical credit loss experience provides the basis for estimation of expected credit losses and are adjusted as necessary using the relevant information available. The Company writes off accounts receivable balances when it is determined that there is no possibility of collection. As of December 31, 2023 and 2022, allowance for credit losses was $1,490 and $2,050, respectively. For the years ended December 31, 2023 and 2022, provision for bad debts was $1,440 and $1,598, respectively, and the write-off amount was $2,000 and $1,933, respectively. 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 consolidated 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. |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses include personnel-related costs, 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. |
In-process Research and Development | In-process Research and Development Intangible assets acquired that are used for research and development, do not yet have regulatory approval for commercialization, and have no future alternative use are expensed as in-process research and development. Collaboration Agreement |
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 Company uses a Monte Carlo simulation model to determine the fair value of performance units with market conditions at the grant date. The Monte Carlo simulation model involves the generation of a large number of possible stock price outcomes for the Company’s stock which is assumed to follow a Geometric Brownian Motion. The use of the Monte Carlo simulation model requires the input of a number of assumptions including expected volatility of the Company’s stock price, which is based on the historical volatility of its stock; risk-free interest rate, which is based on the treasury zero-coupon yield commensurate with the term of the performance unit as of the grant date; and expected dividends as applicable, which is zero, as the Company has never paid any cash dividends. The fair value of stock options and RSUs with service conditions that are expected to vest is amortized on a straight-line basis over the requisite service period. Stock-based compensation for RSUs with performance or market conditions is recorded over the requisite service period using the accelerated attribution method. Stock-based compensation expense is recognized net of actual forfeitures when they occur, as an increase to additional paid-in capital in the consolidated balance sheets and in the selling, general and administrative or research and development expenses in the consolidated statements of operations and comprehensive loss. |
Advertising Costs | Advertising Costs |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined on the basis of differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. 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, the Company 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. 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 consolidated 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. The Company has not recognized interest or penalties in its consolidated statement of operations and comprehensive loss. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. An amount is accrued for the estimate of additional tax liability, including interest and penalties, for any uncertain tax positions taken or expected to be taken in an income tax return. The Company reviews and updates the accrual for uncertain tax positions as more definitive information becomes available. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. The Company monitors changes to the tax laws in the states it conducts business and files corporate income tax returns. The Company does not expect changes to state tax laws through December 31, 2023 to materially impact its consolidated financial statements. |
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 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) . Both ASU No. 2020-04 and ASU No. 2021-01 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU No. 2020-04 and ASU No. 2021-01 are effective upon issuance for contract modifications and hedging relationships, and the Company is allowed to elect to apply the amendments prospectively through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , which extends the temporary accounting rules under Topic 848 to December 31, 2024. The Company transitioned to SOFR from LIBOR on May 9, 2023. There are no material impacts to the consolidated financial statements. 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. The Company adopted this guidance on the effective date of January 1, 2023. There are no material impacts to the consolidated financial statements as a result of this adoption. 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 No. 2016-13, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses . This ASU does not change the core principle of the guidance in ASU No. 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 No. 2019-04 which did not change the core principle of the guidance in ASU No. 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. The Company prospectively adopted this guidance on the effective date of January 1, 2023 and the adoption did not have a material impact to the consolidated financial statements and resulted in no adjustment to the Company’s prior year earnings. Recent Accounting Pronouncements Issued But Not Adopted In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU No. 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This update requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280, on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024, with early adoptions permitted. The Company is currently evaluating the impact of this guidance on its consolidated 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 (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule Assets and Liabilities Measured on 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 December 31, 2023 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 45,030 $ — $ — $ 45,030 As of December 31, 2022 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 46,310 $ — $ — $ 46,310 |
Schedule of Reconciliation of Fair Value Measurement for Contingent Royalty Obligation Payable | The following table shows a reconciliation of the beginning and ending fair value measurements of the contingent royalty obligation payable: Year Ended December 31, 2023 2022 Fair value, beginning of period $ 46,310 $ 44,740 Payments (5,537) (4,185) Change in fair value recorded in operating expenses 4,257 5,755 Fair value, end of period $ 45,030 $ 46,310 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 rights 20 $ 60,552 $ (14,500) $ 46,052 Capitalized software 2 9,804 (8,746) 1,058 Intangible assets, net 70,356 (23,246) 47,110 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2023 $ 91,564 $ (23,246) $ 68,318 Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right 20 $ 59,076 $ (11,545) $ 47,531 Capitalized software 2 8,636 (7,570) 1,066 Intangible assets, net 67,712 (19,115) 48,597 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2022 $ 88,920 $ (19,115) $ 69,805 * Intangible assets with indefinite lives have an indeterminable average life. |
Schedule of Estimated Future Amortization Expense of Intangible Assets | The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2023 that are subject to amortization: Fiscal year 2024 $ 3,936 2025 3,201 2026 3,082 2027 3,054 2028 3,054 Thereafter 30,783 $ 47,110 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of: Year Ended December 31, 2023 2022 Accrued royalties under the Medytox Settlement Agreement $ 3,657 $ 2,618 Accrued payroll and related benefits 13,433 7,454 Accrued revenue contract liabilities 11,033 9,011 Other accrued expenses 5,690 5,711 $ 33,813 $ 24,794 |
Term Loans (Tables)
Term Loans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | As of December 31, 2023, the principal amounts of long-term debt maturities for each of the next five fiscal years are as follows: Fiscal year 2024 $ — 2025 — 2026 41,667 2027 83,333 Total principal payments 125,000 Unamortized debt discounts and issuance costs (4,641) Long term debt, net of discounts and issuance costs $ 120,359 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Composition of Lease Expense and Other Quantitative Information | The components of operating lease expense are as follows: Year Ended December 31, 2023 2022 Fixed operating lease expense $ 1,164 $ 1,084 Variable operating lease expense 183 91 $ 1,347 $ 1,175 The weighted-average remaining lease term and discount rate are as follows: As of December 31, 2023 2022 Weighted-average remaining lease term (years) 6.1 2.1 Weighted-average discount rate 11.0% 9.4% |
Schedule of Maturity of Operating Lease Liabilities | The following table presents the future minimum payments under the operating lease agreements with non-cancelable terms as of December 31, 2023: Fiscal year 2024 $ 1,377 2025 1,053 2026 1,451 2027 1,502 2028 1,555 Thereafter 1,744 Total operating lease payments 8,682 Less: imputed interest (2,495) Present value of operating lease liabilities $ 6,187 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Key Assumptions Used to Determine Fair Value of Options Granted | The assumptions used in determining the fair value of stock options granted were as follows: Year Ended December 31, 2023 2022 Volatility 83.6% 78.9% Risk-free interest rate 3.7% 2.1% Expected life (years) 6.21 6.19 Dividend yield rate —% —% |
Schedule of Stock Options Activity | A summary of stock option activity for the year ended December 31, 2023 and 2022, is presented below: Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Per Share Terms (Years) Value Outstanding as of December 31, 2021 3,922,286 $ 11.23 7.10 $ 455 Granted 1,773,043 6.82 Exercised (53,098) 10.08 Cancelled/forfeited (872,710) 13.19 Outstanding as of December 31, 2022 4,769,521 $ 9.24 7.02 $ 2,911 Granted 1,406,922 10.54 Exercised (39,823) 5.59 Cancelled/forfeited (383,154) 11.14 Outstanding as of December 31, 2023 5,753,466 $ 9.46 6.69 $ 11,111 Exercisable as of December 31, 2023 3,370,875 $ 9.79 5.32 $ 6,815 |
Schedule of RSUs Activity | A summary of RSU activity for the year ended December 31, 2023 and 2022, is presented below: Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding as of December 31, 2021 1,926,467 $ 8.06 Granted 1,890,533 7.00 Vested (630,484) 8.02 Forfeited (490,059) 7.21 Outstanding as of December 31, 2022 2,696,457 $ 7.48 Granted 1,746,415 10.27 Vested (851,759) 7.33 Forfeited (310,068) 8.79 Outstanding as of December 31, 2023 3,281,045 $ 8.88 A summary of PRSU activity for the year ended December 31, 2023 and 2022, is presented below: Performance Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding as of December 31, 2022 — $ — Granted 292,349 10.25 Vested (58,469) 10.25 Forfeited — — Outstanding as of December 31, 2023 233,880 $ 10.25 |
Schedule of Stock-based Compensation Expense | The following table summarizes stock-based compensation expense: Year Ended December 31, 2023 2022 Selling, general and administrative $ 15,564 $ 10,565 Research and development 894 268 Total stock-based compensation expense $ 16,458 $ 10,833 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss before Income Taxes from U.S. Operations and Foreign | The Company’s loss before income taxes was generated from its U.S. operations and foreign operations as follows: Year Ended December 31, 2023 2022 United States $ 51,004 $ 66,103 Foreign 10,505 8,214 Loss before taxes $ 61,509 $ 74,317 |
Schedule of Components of Current and Deferred Income Tax Expense | The following table shows the expense (benefit) for income taxes: Year Ended December 31, 2023 2022 Current provision: Federal $ — $ — State 138 113 Foreign 33 — Total current provision $ 171 $ 113 Deferred provision (benefit): Federal $ 1 $ (8) State 4 (10) Foreign — — Total deferred (benefit) provision $ 5 $ (18) Total provision for income taxes $ 176 $ 95 |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities were as follows: As of December 31, 2023 2022 Deferred income tax assets: Net operating losses $ 83,257 $ 80,494 Stock compensation 5,442 5,168 Research and Development credits 2,617 2,617 Accrued compensation 5,955 4,675 Operating lease liabilities 1,567 646 Accrued legal settlement 17,674 19,203 R&E Capitalization 3,415 1,100 Fixed asset depreciation 183 — Other, net 5,126 2,135 Valuation allowance (116,073) (103,695) Total deferred income tax assets 9,163 12,343 Deferred income tax liabilities: Intangible amortization (7,730) (11,525) Operating lease right-of-use assets (1,460) (495) Fixed asset depreciation — (345) Total deferred income tax liabilities (9,190) (12,365) Net deferred income taxes $ (27) $ (22) |
Schedule of Effective Income Tax | A reconciliation of the difference between the provision (benefit) for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows: Year Ended December 31, 2023 2022 Income tax at statutory rate $ (12,917) $ (15,607) State income taxes, net of Federal benefit (1,981) (2,673) Revaluation of contingent royalty obligation 1,078 1,462 Meals and entertainment 385 358 Change in state tax rate 218 (3) Officers' compensation 793 (1,529) Foreign Rate Differential 222 10 Stock compensation 449 299 Other, net (449) (391) Valuation allowance 12,378 18,169 Income tax provision (benefit) $ 176 $ 95 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2023 2022 Beginning balance $ 2,924 $ 2,924 Increases to prior year tax positions — — Increases to current year tax positions — — Ending balance $ 2,924 $ 2,924 |
Description of Business (Detail
Description of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Operating income (loss) | $ (49,233) | $ (65,330) | |||
Net loss | 61,685 | 74,412 | |||
Net cash used in operating activities | 34,008 | 84,912 | |||
Payments for legal settlements | 5,000 | 15,000 | |||
License, supply and distribution agreement, upfront payment | 4,441 | ||||
Cash and cash equivalents | 62,838 | 53,922 | |||
Accumulated deficit | 558,979 | $ 497,294 | |||
Intellectual Property Disputes, Jeuveau | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Payments for legal settlements | $ 5,000 | $ 15,000 | $ 15,000 | $ 5,000 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) € in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 20, 2023 EUR (€) filler_candidate milestone country shares | May 09, 2023 EUR (€) | Feb. 18, 2021 USD ($) | Dec. 14, 2017 | Jun. 30, 2023 USD ($) | Feb. 28, 2021 USD ($) shares | Mar. 31, 2023 USD ($) shares | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2023 USD ($) reporting_unit shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2023 EUR (€) | |
Property, Plant and Equipment [Line Items] | ||||||||||||
Number of reporting units | reporting_unit | 1 | |||||||||||
Impairment of goodwill | $ 0 | $ 0 | ||||||||||
Impairment of intangible assets | 0 | 0 | ||||||||||
Accrued revenue contract liabilities | 11,033,000 | 9,011,000 | ||||||||||
Rebates and coupons, credits and payments | 32,511,000 | 22,759,000 | ||||||||||
Payments for provisions for accrued volume-based rebate and coupon liability | 30,489,000 | 21,682,000 | ||||||||||
Contract with customer, liability, revenue recognized | 7,868,000 | 7,566,000 | ||||||||||
Allowance for doubtful accounts | 1,490,000 | 2,050,000 | ||||||||||
Provision for bad debts | 1,440,000 | 1,598,000 | ||||||||||
Allowance for credit loss, writeoff | 2,000,000 | 1,933,000 | ||||||||||
In-process research and development | 8,869,000 | 2,000,000 | ||||||||||
License, supply and distribution agreement, upfront payment | 4,441,000 | |||||||||||
Non-cash in-process research and development expense | 4,429,000 | 0 | ||||||||||
Loss contingency accrual | 0 | |||||||||||
Payments for legal settlements | 5,000,000 | 15,000,000 | ||||||||||
Accrued litigation settlement | 0 | 5,000,000 | ||||||||||
Advertising costs | 7,490,000 | $ 11,642,000 | ||||||||||
Symatese U.S. Agreement | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Contingent milestone payment | € | € 16,200 | |||||||||||
License, supply and distribution agreement, initial payment | € | € 4,100 | |||||||||||
License, supply and distribution agreement, initial payment due, period | 30 days | |||||||||||
License, supply and distribution agreement payment, June 2025 | € | € 1,600 | |||||||||||
License, supply and distribution agreement payment, June 2026 | € | 4,100 | |||||||||||
License, supply and distribution agreement payment, June 2027 | € | 3,200 | |||||||||||
License, supply and distribution agreement payment, June 2028 | € | € 3,200 | |||||||||||
License, supply and distribution agreement, initial term | 15 years | |||||||||||
License, supply and distribution agreement, renewal term | 5 years | |||||||||||
License, supply and distribution agreement, upfront payment | $ 4,441,000 | $ 4,441,000 | ||||||||||
Symatese Europe Agreement | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
License, supply and distribution agreement payment, June 2026 | € | € 1,200 | |||||||||||
License, supply and distribution agreement payment, June 2027 | € | € 1,900 | |||||||||||
Number of filler product candidates | filler_candidate | 4 | |||||||||||
Number of countries use aesthetics and dermatological fields | country | 50 | |||||||||||
Number of milestone payment | milestone | 2 | |||||||||||
Annual revenue | € | € 25,000 | |||||||||||
Initial agreement term | 15 years | 15 years | ||||||||||
Common Stock Options | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Securities excluded from the computation of diluted net loss per share (in shares) | shares | 5,753,466 | 4,769,521 | ||||||||||
Unvested Restricted Stock Units | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Securities excluded from the computation of diluted net loss per share (in shares) | shares | 3,281,045 | 2,663,320 | ||||||||||
Intellectual Property Disputes, Jeuveau | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Loss contingency accrual | $ 35,000,000 | $ 35,000,000 | ||||||||||
Settlement agreement, payment terms (in years) | 2 years | 2 years | ||||||||||
Payments for legal settlements | $ 5,000,000 | $ 15,000,000 | $ 15,000,000 | $ 5,000,000 | ||||||||
Common Stock | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Stock issued in exchange for license, supply, and distribution agreement (in shares) | shares | 610,000 | |||||||||||
Issuance of common stock in connection with litigation settlement (in shares) | shares | 6,762,652 | 6,762,652 | ||||||||||
Common Stock | Symatese Europe Agreement | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Stock issued in exchange for license, supply, and distribution agreement (in shares) | shares | 610,000 | |||||||||||
Evolus, Inc. | SCH | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Period of termination of first commercial sale | 10 years | |||||||||||
Distribution rights | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Useful lives of intangible assets | 20 years | 20 years | 20 years | |||||||||
Finite-live intangible assets capitalized | $ 1,476,000 | |||||||||||
Symatese License | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Useful lives of intangible assets | 15 years | 15 years | ||||||||||
Software Development | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Useful lives of intangible assets | 2 years | 2 years | ||||||||||
Minimum | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Property, plant and equipment, useful life | 3 years | 3 years | ||||||||||
Maximum | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Property, plant and equipment, useful life | 5 years | 5 years |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | $ 45,030 | $ 46,310 | $ 44,740 |
Contingent royalty obligation payable to Evolus Founders | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | 45,030 | 46,310 | |
Contingent royalty obligation payable to Evolus Founders | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | 0 | 0 | |
Contingent royalty obligation payable to Evolus Founders | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | 0 | 0 | |
Contingent royalty obligation payable to Evolus Founders | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | $ 45,030 | $ 46,310 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | $ 45,030 | $ 46,310 | $ 44,740 |
Fair Value | Pharmakon Term Loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | $ 140,241 | $ 75,232 | |
Contingent Royalty Obligation | Measurement Input, Discount Rate | Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 0.130 | 0.130 | |
Contingent Royalty Obligation | Measurement Input, Discount Rate | Maximum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 0.150 | 0.150 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Fair Value Measurement of Contingent Royalty Obligation Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning of period | $ 46,310 | $ 44,740 |
Payments | (5,537) | (4,185) |
Change in fair value recorded in operating expenses | 4,257 | 5,755 |
Fair value, end of period | $ 45,030 | $ 46,310 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Definite and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Definite-lived intangible assets | ||
Original Cost | $ 70,356 | $ 67,712 |
Accumulated Amortization | (23,246) | (19,115) |
Net Book Value | 47,110 | 48,597 |
Indefinite-lived intangible asset | ||
Goodwill | 21,208 | 21,208 |
Intangible assets, gross (including goodwill) | 91,564 | 88,920 |
Total net book value | $ 68,318 | $ 69,805 |
Distribution rights | ||
Definite-lived intangible assets | ||
Weighted-Average Life (Years) | 20 years | 20 years |
Original Cost | $ 60,552 | $ 59,076 |
Accumulated Amortization | (14,500) | (11,545) |
Net Book Value | $ 46,052 | $ 47,531 |
Capitalized software | ||
Definite-lived intangible assets | ||
Weighted-Average Life (Years) | 2 years | 2 years |
Original Cost | $ 9,804 | $ 8,636 |
Accumulated Amortization | (8,746) | (7,570) |
Net Book Value | $ 1,058 | $ 1,066 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Estimated Future Amortization Expense of Intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 3,936 | |
2025 | 3,201 | |
2026 | 3,082 | |
2027 | 3,054 | |
2028 | 3,054 | |
Thereafter | 30,783 | |
Net Book Value | $ 47,110 | $ 48,597 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Amortization expense | $ 4,072 | $ 3,350 |
Distribution rights | ||
Business Acquisition [Line Items] | ||
Finite-live intangible assets capitalized | $ 1,476 | |
Useful lives of intangible assets | 20 years | 20 years |
Symatese License | ||
Business Acquisition [Line Items] | ||
Useful lives of intangible assets | 15 years | |
Capitalized software | ||
Business Acquisition [Line Items] | ||
Capitalized computer software | $ 1,168 | $ 1,322 |
Useful lives of intangible assets | 2 years | 2 years |
Remaining amortization period | 2 years |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued royalties under the Medytox Settlement Agreement | $ 3,657 | $ 2,618 |
Accrued payroll and related benefits | 13,433 | 7,454 |
Accrued revenue contract liabilities | 11,033 | 9,011 |
Other accrued expenses | 5,690 | 5,711 |
Accounts payable and accrued liabilities, current | $ 33,813 | $ 24,794 |
Term Loans - Narrative (Details
Term Loans - Narrative (Details) | 12 Months Ended | ||||||
Dec. 15, 2023 USD ($) | May 31, 2023 USD ($) | May 09, 2023 USD ($) payment installment | Dec. 05, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 14, 2021 USD ($) tranche | |
Debt Instrument [Line Items] | |||||||
Payments for debt issuance costs | $ 46,000 | $ 500,000 | |||||
Debt instrument, number of installments | installment | 2 | ||||||
Proceeds from issuance of long-term debt, net of discounts | $ 50,000,000 | $ 0 | |||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, prepayment amount threshold | $ 20,000,000 | ||||||
Pharmakon Term Loans | |||||||
Debt Instrument [Line Items] | |||||||
Number of tranches | tranche | 2 | ||||||
Pharmakon Term Loans | Prior to the 3rd anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of long-term debt, net of discounts | $ 25,000,000 | ||||||
Pharmakon Term Loans | After the 3rd anniversary but prior to the 4th anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of long-term debt, net of discounts | $ 25,000,000 | ||||||
Pharmakon Term Loans | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Maturity term of debt | 6 years | ||||||
Periodic payment, percentage of outstanding principal amount | 0.0833 | ||||||
Periodic payment, number of quarterly principal payments due | payment | 7 | ||||||
Periodic payment, Initial principal payment, period | 51 months | ||||||
Interest rate on debt | 1% | ||||||
Debt discount | $ 3,042,000 | ||||||
Debt issuance costs | 3,263,000 | ||||||
Pharmakon Term Loans | Term Loan | London Interbank Offered Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 8.50% | ||||||
Pharmakon Term Loans | Term Loan | Secured Financing Offered Rate (SOFR) | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate on debt | 1% | ||||||
Basis spread on variable rate | 8.50% | ||||||
Tranche A Loan | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 75,000,000 | ||||||
Interest rate, effective percentage | 15.33% | ||||||
Tranche A Loan | Term Loan | Prior to the 3rd anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, percentage of principal amount, prepaid multiplied | 3% | ||||||
Tranche A Loan | Term Loan | After the 3rd anniversary but prior to the 4th anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, percentage of principal amount, prepaid multiplied | 2% | ||||||
Tranche A Loan | Term Loan | After the 4th anniversary | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, percentage of principal amount, prepaid multiplied | 1% | ||||||
Tranche B Loan | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 50,000,000 | $ 50,000,000 | |||||
Payments for debt issuance costs | $ 500,000 | ||||||
Interest rate, effective percentage | 14.01% |
Term Loans - Schedule of Long T
Term Loans - Schedule of Long Term Debt Maturities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 0 |
2025 | 0 |
2026 | 41,667 |
2027 | 83,333 |
Total principal payments | 125,000 |
Unamortized debt discounts and issuance costs | (4,641) |
Long term debt, net of discounts and issuance costs | $ 120,359 |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jul. 27, 2023 | Dec. 31, 2022 | Mar. 15, 2019 |
Leases [Abstract] | ||||
Term of contract | 5 years | |||
Renewal term | 60 months | |||
Lessee, operating lease, abatement period | 3 months | |||
Present value of operating lease liabilities | $ 6,187 | $ 4,550 | ||
Operating lease right-of-use assets | $ 5,763 | $ 4,550 | $ 1,947 |
Operating Leases - Components o
Operating Leases - Components of Lease Expense and Other Quantitative Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Fixed operating lease expense | $ 1,164 | $ 1,084 |
Variable operating lease expense | 183 | 91 |
Lease, cost | $ 1,347 | $ 1,175 |
Operating Leases - Weighted-Ave
Operating Leases - Weighted-Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term (years) | 6 years 1 month 6 days | 2 years 1 month 6 days |
Weighted-average discount rate | 11% | 9.40% |
Operating Leases - Maturity of
Operating Leases - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jul. 27, 2023 |
Leases [Abstract] | ||
2024 | $ 1,377 | |
2025 | 1,053 | |
2026 | 1,451 | |
2027 | 1,502 | |
2028 | 1,555 | |
Thereafter | 1,744 | |
Total operating lease payments | 8,682 | |
Less: imputed interest | (2,495) | |
Present value of operating lease liabilities | $ 6,187 | $ 4,550 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | Nov. 17, 2021 officer | Dec. 02, 2020 plaintiff | Oct. 28, 2020 complaint | Dec. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | ||||
Purchase commitment, amount | $ 2,044,000 | |||
Loss contingency accrual | $ 0 | |||
Loss contingency, new claims filed, number | complaint | 2 | |||
Loss contingency, number of defendants, officers | officer | 3 | |||
Loss contingency, number of plaintiffs | plaintiff | 2 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
May 08, 2023 trading_day $ / shares shares | Mar. 08, 2023 USD ($) | Nov. 21, 2017 shares | Jan. 31, 2023 shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Nov. 21, 2023 shares | Sep. 30, 2023 shares | Nov. 21, 2022 shares | Dec. 31, 2021 shares | |
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) | $ / shares | $ 0.00001 | $ 0.00001 | ||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||||||||
Preferred stock, shares issued (in shares) | 0 | 0 | ||||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||||||
Common stock, shares, issued (in shares) | 57,820,621 | 56,260,570 | ||||||||
Common stock, shares, outstanding (in shares) | 57,820,621 | 56,260,570 | ||||||||
Maximum number of shares authorized under the plan (in shares) | 4,361,291 | |||||||||
Annual increase percentage of maximum shares outstanding (equal to) | 4% | |||||||||
Additional shares reserved for issuance (in shares) | 2,287,649 | 2,249,863 | ||||||||
Capital shares reserved for future issuance (in shares) | 2,919,942 | |||||||||
Total stock-based compensation expense | $ | $ 16,458 | $ 10,833 | ||||||||
Unvested Restricted Stock Units | ||||||||||
Class of Stock [Line Items] | ||||||||||
Granted (in shares) | 1,746,415 | 1,890,533 | ||||||||
Common Stock Options | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share-based payment award, expiration period | 10 years | |||||||||
Fair value assumptions, weighted average expected term | 6 years | |||||||||
Dividend yield rate | 0% | |||||||||
Performance Restricted Stock Units (PRSU) | ||||||||||
Class of Stock [Line Items] | ||||||||||
Granted (in shares) | 292,349 | 292,349 | ||||||||
Minimum | Unvested Restricted Stock Units | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting period | 1 year | |||||||||
Maximum | Unvested Restricted Stock Units | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting period | 4 years | |||||||||
2023 Inducement Incentive Plan | ||||||||||
Class of Stock [Line Items] | ||||||||||
Capital shares reserved for future issuance (in shares) | 1,000,000 | |||||||||
Common stock available for future issuance (in shares) | 718,060 | |||||||||
2017 Omnibus Incentive Plan | CEO Performance Restricted Share Units (CPRSU) | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting period | 4 years | |||||||||
Granted (in shares) | 560,000 | |||||||||
Contractual term | 5 years | |||||||||
Contractual term after termination | 20 days | |||||||||
Total stock-based compensation expense | $ | $ 3,774 | |||||||||
2017 Omnibus Incentive Plan | CEO Performance Restricted Share Units (CPRSU) | 20 Consecutive Trading Days with a $30 Share Price | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting percentage | 40% | |||||||||
Number of consecutive days | trading_day | 20 | |||||||||
Consecutive trading amount (USD per share) | $ / shares | $ 30 | |||||||||
2017 Omnibus Incentive Plan | CEO Performance Restricted Share Units (CPRSU) | 20 Consecutive Trading Days with a $50 Share Price | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting percentage | 60% | |||||||||
Number of consecutive days | trading_day | 20 | |||||||||
Consecutive trading amount (USD per share) | $ / shares | $ 50 | |||||||||
ATM Sales Agreement | ||||||||||
Class of Stock [Line Items] | ||||||||||
Maximum consideration receivable | $ | $ 50,000 | |||||||||
Sale of stock, commission payment upon gross proceeds | 3% | |||||||||
Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock, shares, issued (in shares) | 57,820,621 | 56,260,570 | 55,576,988 |
Stockholders' Equity - Valuatio
Stockholders' Equity - Valuation Assumptions (Details) - Common Stock Options | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield rate | 0% | |
Stock Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 83.60% | 78.90% |
Risk-free interest rate | 3.70% | 2.10% |
Expected life (years) | 6 years 2 months 15 days | 6 years 2 months 8 days |
Dividend yield rate | 0% | 0% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Option Activity (Details) - Common Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options | |||
Beginning balance (in shares) | 4,769,521 | 3,922,286 | |
Granted (in shares) | 1,406,922 | 1,773,043 | |
Exercised (in shares) | (39,823) | (53,098) | |
Cancelled/forfeited (in shares) | (383,154) | (872,710) | |
Ending balance (in shares) | 5,753,466 | 4,769,521 | 3,922,286 |
Stock options, exercisable (in shares) | 3,370,875 | ||
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 9.24 | $ 11.23 | |
Granted (in dollars per share) | 10.54 | 6.82 | |
Exercised (in dollars per share) | 5.59 | 10.08 | |
Cancelled/forfeited (in dollars per share) | 11.14 | 13.19 | |
Ending balance (in dollars per share) | 9.46 | $ 9.24 | $ 11.23 |
Weighted average exercise price, exercisable (in dollars per share) | $ 9.79 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Stock options contractual term, outstanding | 6 years 8 months 8 days | 7 years 7 days | 7 years 1 month 6 days |
Weighted average remaining contractual term, exercisable | 5 years 3 months 25 days | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value, outstanding | $ 11,111 | $ 2,911 | $ 455 |
Aggregate intrinsic value, exercisable | $ 6,815 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Restricted Stock Unit Activity (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
RSUs | |||
Restricted Stock Unit | |||
Beginning balance (in shares) | 2,696,457 | 2,696,457 | 1,926,467 |
Granted (in shares) | 1,746,415 | 1,890,533 | |
Vested (in shares) | (851,759) | (630,484) | |
Forfeited (in shares) | (310,068) | (490,059) | |
Ending balance (in shares) | 3,281,045 | 2,696,457 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 7.48 | $ 7.48 | $ 8.06 |
Granted (in dollars per share) | 10.27 | 7 | |
Vested (in dollars per share) | 7.33 | 8.02 | |
Forfeited (in dollars per share) | 8.79 | 7.21 | |
Ending balance (in dollars per share) | $ 8.88 | $ 7.48 | |
Performance Restricted Stock Units (PRSU) | |||
Restricted Stock Unit | |||
Beginning balance (in shares) | 0 | 0 | |
Granted (in shares) | 292,349 | 292,349 | |
Vested (in shares) | (58,469) | ||
Forfeited (in shares) | 0 | ||
Ending balance (in shares) | 233,880 | 0 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 0 | $ 0 | |
Granted (in dollars per share) | 10.25 | ||
Vested (in dollars per share) | 10.25 | ||
Forfeited (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | $ 10.25 | $ 0 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 16,458 | $ 10,833 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 15,564 | 10,565 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 894 | $ 268 |
Medytox_Allergan Settlement A_2
Medytox/Allergan Settlement Agreements and Daewoong Arrangement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 23, 2021 | Feb. 18, 2021 | Feb. 28, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | ||||||||
Settlement agreement, manufacturing license period (months) | 21 months | |||||||
Loss contingency accrual | $ 0 | |||||||
Payments for legal settlements | $ 5,000,000 | $ 15,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | ||||||
Share issuance agreement, percentage of share dispose per year, initial period | 25% | |||||||
Share issuance agreement, percentage of share dispose per year, period two | 50% | |||||||
Share issuance agreement, percentage of share dispose per year, period three | 75% | |||||||
Registration rights agreement, selling period | 3 months | |||||||
Accrued royalties under the Medytox Settlement Agreement | $ 3,657,000 | $ 2,618,000 | ||||||
Accrued litigation settlement | 5,000,000 | |||||||
Inventory payments | 50,770,000 | $ 50,685,000 | ||||||
Daewoong Settlement Agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Long-term purchase commitment, amount | $ 25,500,000 | |||||||
Contingent milestone payment | $ 10,500,000 | |||||||
Common Stock | ||||||||
Loss Contingencies [Line Items] | ||||||||
Issuance of common stock in connection with litigation settlement (in shares) | 6,762,652 | 6,762,652 | ||||||
Intellectual Property Disputes, Jeuveau | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency accrual | $ 35,000,000 | $ 35,000,000 | ||||||
Settlement agreement, payment terms (in years) | 2 years | 2 years | ||||||
Payments for legal settlements | $ 5,000,000 | $ 15,000,000 | $ 15,000,000 | $ 5,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.00001 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Defined contributions to 401(k) plan | $ 1,582 | $ 773 |
Income Taxes - Loss Before Inco
Income Taxes - Loss Before Income Taxes from U.S. Operations and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
United States | $ 51,004 | $ 66,103 |
Foreign | 10,505 | 8,214 |
Loss before income taxes: | $ 61,509 | $ 74,317 |
Income Taxes - Components of Cu
Income Taxes - Components of Current and Deferred Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current provision: | ||
Federal | $ 0 | $ 0 |
State | 138 | 113 |
Foreign | 33 | 0 |
Total current provision | 171 | 113 |
Deferred provision (benefit): | ||
Federal | 1 | (8) |
State | 4 | (10) |
Foreign | 0 | 0 |
Total deferred (benefit) provision | 5 | (18) |
Total provision for income taxes | $ 176 | $ 95 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Tax Credit Carryforward [Line Items] | ||
Accrued interest and penalties related to income tax matters | $ 0 | $ 0 |
Federal | ||
Tax Credit Carryforward [Line Items] | ||
NOL carryforwards | 317,668,000 | |
Operating loss carryforwards, subject to expiration | 72,579,000 | |
Operating loss carryforwards, not subject to expiration | 245,089,000 | |
Federal | R&D | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforwards | 2,929,000 | |
State | ||
Tax Credit Carryforward [Line Items] | ||
NOL carryforwards | 227,347,000 | |
State | R&D | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforwards | $ 2,918,000 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred income tax assets: | ||
Net operating losses | $ 83,257 | $ 80,494 |
Stock compensation | 5,442 | 5,168 |
Research and Development credits | 2,617 | 2,617 |
Accrued compensation | 5,955 | 4,675 |
Operating lease liabilities | 1,567 | 646 |
Accrued legal settlement | 17,674 | 19,203 |
R&E Capitalization | 3,415 | 1,100 |
Fixed asset depreciation | 183 | 0 |
Other, net | 5,126 | 2,135 |
Valuation allowance | (116,073) | (103,695) |
Total deferred income tax assets | 9,163 | 12,343 |
Deferred income tax liabilities: | ||
Intangible amortization | (7,730) | (11,525) |
Operating lease right-of-use assets | (1,460) | (495) |
Fixed asset depreciation | 0 | (345) |
Total deferred income tax liabilities | (9,190) | (12,365) |
Net deferred income taxes | $ (27) | $ (22) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax at statutory rate | $ (12,917) | $ (15,607) |
State income taxes, net of Federal benefit | (1,981) | (2,673) |
Revaluation of contingent royalty obligation | 1,078 | 1,462 |
Meals and entertainment | 385 | 358 |
Change in state tax rate | 218 | (3) |
Officers' compensation | 793 | (1,529) |
Foreign Rate Differential | 222 | 10 |
Stock compensation | 449 | 299 |
Other, net | (449) | (391) |
Valuation allowance | 12,378 | 18,169 |
Total provision for income taxes | $ 176 | $ 95 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 2,924 | $ 2,924 |
Increases to prior year tax positions | 0 | 0 |
Increases to current year tax positions | 0 | 0 |
Ending balance | $ 2,924 | $ 2,924 |