EOLS - Earnings call transcript Q4 2018

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Operator

Good day ladies and gentlemen and welcome to the Evolus Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-answer-session and instructions will follow at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to introduce your host for today's conference, Mr.

Finance, and President Vice Agarwal, Investor Treasury. Relations Ashwin please go ahead. Sir, .

Ashwin Agarwal

and Internet everyone operator, and being today's the Chief Executive on a the considered and days. Officer; meaning be you, Moatazedi, Officer. for statements Head me call participating Lauren EVP of broadcast Officer www.evolus.com the replay welcome over Company's also Corporate securities Thank States David Chief Financial Avelar, include Development the and of available is remarks President of on forward-looking to our Chief R&D Medical in today's In will will are and the call today, call. live XX Rui and website at With Silvernail, This call United laws. statements we within are that

make In forward-looking addition, response statements questions. to may additional management your in

current statements risks on faces the XX, subsequent reports reports or no or to implied XXXX business, the and in projection forward-looking report assumptions Form Form expectations statements. Company on filed on of XX, forward-looking operations quarterly affect The its the ended is detailed differ XX-K strategy, current SEC update Actual of December based undertakes or estimate, A Forward-looking events on may the obligation year Company's quarterly Company trends XX-Q uncertainties those performance. and that and results statement. discussion X-K. expressed are any which management's contained in and XXXX for future and financial on Form or may with the from March materially by review the

addition for may GAAP GAAP A me the in investors.evolus.com. measures include These which will Relations to with isolation from as results a of today call substitute measures. now, discussion or furnished non-GAAP let David Moatazedi. on be the today the not filed with should reconciliation release Form hand SEC non-GAAP be And in be our Investor considered and website financial in may our to at X-K also to our results. Additionally, earnings and found found was our over non-GAAP

David Moatazedi

timeframe, for a and update thank Good marked transforming product the of February marks an on set milestones. a all all our the IPO market. transitioned application our major achieved on Jeuveau and company’s successfully R&D-focused FDA inflection Xst approval our now from to with The a month in for received in submitted of call. We afternoon opinion sites Jeuveau Canada. point short our approval you We expect our commercial-stage one-year approval Last we our year aesthetic and critical full and approval flagship fourth The XXXX in shortly. history. European anniversary joining FDA have that organization U.S. Evolus CHMP company quarter and

experienced and highest in industry. aesthetic We most management the of quality have one the assembled teams

publication for clinical aesthetic submitted Botox. includes Phase global versus largest have our TRANSPARENCY III head-to-head program. pivotal We This the results from trial

number formidable industry. two which the launch. nearing which with within closed of We million, includes cash and received FUSE, to hiring force of market attracted XXX sales months forma specialized position announced $XXX top person, proceeds are as is earlier of We competitor Project Jeuveau catapult designed talent from the from is our weeks, the to Jeuveau a we completion pro approximately challenge We for have In twenty-four the today. to XXXX coming been of know a financing authored leader enter now. market the transform will category largest aesthetics. the There debt announced XXXX we has expect and launch to the Jeuveau today. market the until pivotal Evolus not it in year aesthetic

complete. Our plans are

initial advantage person what be sales engage the of launch, to we fully the three with launch there to focus talk aesthetic And ready a market degree high At successful execute singularity a with will and to a the we most and of dimensions today, code executing strategy. prepared urgency. category, named XXX In deploy on plan have our market. are funded launch believe are this pricing FUSE, well engage exciting our you will are broader which team to about will price. We

first price. product The is list

sets leader. to of the a program program will the improve second the associated volume-based market price category, the is physician with The discounts pricing The higher relative those procedure product competitive of the third consumer list to incentivizes this to pricing the purchase loyalty. consumer. products physician is and and volume-based In volumes retail volumes profitability the price doctors the

the loyalty consumer the of improve the intent procedure program to of is the affordability Lastly, for patients.

Evolus as invest then competitive a to vial now a improving the to its affordability doctors unit direct the result, Jeuveau does relative provide price not to enter a first for brands. will and XXX the Jeuveau. which of and require are a nearly discount decade. seeing market a we to a for premium slight market of value a Today, access reflection the of list price This is in in $XXX As represents is patients neurotoxin premium leader

Jeuveau introduce coming Hi-Pure. premium of and Jeuveau manufacturing brand redefine unfold Jeuveau a the branded and U.S. versus addition, Phase in process launch which a is supported has the the market to experience weeks. as only designed in branding customer In centricity. premium data The by the distinct new leader the III is and head-to-head will

to been should For modeling has purposes, assume previously you same that discount the reported. percentage continue

the space discounts know, offer companies volume. all you As based on in

to call highlights. do full QX price over in what to Lauren to now reasons, that - the turn provide that not financial volume-based With for review like assume can a pricing will plan year You we who physician physician future. that, volume-based I’d our selling XXXX the will offer, average offer competitive will but report of we we pricing and

Lauren Silvernail

David end you, $XX.X good we the afternoon Thank in and cash. XXXX, At million had of everyone.

million drew close. announced we and million non-dilutive, $XXX entered we Oxford $XX As upon today, with facility debt Finance a into senior

debt been structured Oxford has are our The to to We pleased partnered senior growth the is maintaining our provide while be we need with very business. capital facility flexibility. to operating build

consideration XX/XX/XXXX or cash balance putting Including cash for $XXX about at covenant, drew years forma we free was cash $XX The now. minimum a The debt close maintaining our $XX to shareholders a the quarter not million flexibility. revenue, in tranche as from us by of scheduled include first first from key repaid XXXX other for is in this of XXXX us does the of five financing, the pro be million all million, note senior figure earnings and very debt Please cash is flows. strong any position.

our due. outlays in reminder, and XXXX, of one-time before cash this due Daewoong the as of is FDA Jeuveau we founders. upon Thinking about have $XX.X We expect a to approval Evolus be and cash million flow breakeven payments partner to EU debt milestone

approval. cash be the $XX.X $X EU paid and has the upon impact total with regard remaining treatments, will On will note $X.X already P&L. the line the to of our XXXX million expense million the payments million been of sheet accounting $XX.X to balance side, with out paid I Please impact of QX million operating

provided QX due million respectively. and was non-GAAP below were and guidance expense XXXX the on million $XX year we our non-GAAP to million of certain QX expenses XXXX full call Our slightly QX earnings operating $XX $XX.X to expenses. $XX.X the million timing operating for of

which million track expense. non-GAAP two it of $X.X easier royalty XXXX. and stock-based in $XX.X items our $X.X of and QX providing $X.X operating are we year XXXX. to reminder, a compensation was make expenses excluding contingent non-cash QX expense metric to compensation million of million Stock-based million full obligation and in year are royalty a As revaluation for for revaluation Non-cash reflects income full

provide like help XXXX, have models. with For to there highlight to items guidance or you your decided we launch financial would revenue But during not year. expense few we a are to the

non-GAAP This Our non-GAAP QX $XX in as just pre-launch operating G&A, we $XX will this to $XX million XXXX quarter on and representatives basis. and our annualized R&D exited than was million be expenses. expenses $XX.X – in me, between million note, excuse in Hiring for XXXX selling representing sales XXXX includes of under annualized expense rate. million expense $XX XXX first lower an an increases runrate Please annualized the selling million XXXX. be

this or launch. just are provided note loyalty at on revaluation the do roll Please numbers getting ready compensation not include to expense. providing marketing out as We expenses our are the further we also not or detail commercial time stock-based

to to side, call what cash as trial And one that, – we we XXXX the mentioned currently is loaded interest quarter I’ll revenue of as back the have the rate. On build towards at annual with be back borrowed with X.X importantly, customers. over our million turn experience expect we and earlier, time, we David. X.X% $XX And most fourth a more

David Moatazedi

look before is number upcoming head-to-head spring it’s Investor anticipate The clear. a and book of to path and the the only successful through of are you, we and customers. on to Phase Xth. presenting complement versus BOTOX expected information Analyst to and commercial III plan EU Canada of which May We the Phase the success. first matter of story will our Jeuveau U.S. Lauren. and of our chapters of trial our III are forward is A launch our unveiled. label results this in results publication time relevant both In XXXX, to enable our of half the further provide written at now launch our The Day clinically catalysts Thank

premium a impactful and poised Operator? the Our caliber over enter an brand Q&A. and for strategy. sales U.S. with call high that, markets commercial team to With force I’ll turn is the

Operator

Louise go [Operator Instructions] Our first question comes Please from ahead. Cantor. Chen from

Louise Chen

had a Hi, my thanks questions questions. taking here. for I few

network XXXX. sales and but there to we have will I color and for the percentage First some qualitatively did are on There should leaders as give their think sales Dave see is know had their you well. to how they is key XXXX guidance relative guidance, giving about opinion some that historical LCI not one I Evolus comps was, for then we of for Jeuveau? the

Thank if concerns of and ahead your you with As that? space a runway, is curious to? anticipated your the how lot what’s regarding the plan just a you launch could on questions, curious get gotten built lot already the to cash and provide some financing does think other we’ve question the is, And about question any launch then your this competitors cash just just much that we color? you second you. existing last far qualitative the of counter-detailing and had out how of I into balance, here And in

David Moatazedi

base the at preparing same amongst the and of you back you time, is information I’ll there step and share and just both firstly, around the Maybe and about to deliberate that question actively each for out how loss. protect leader that, as a you take for but we’ve the to launch not that rolled this And from related market part Thank different Great. our commercial and a element and is all would level point deliberate messaging against we’ve in if Jeuveau roll competitive anticipation out field Louise. there of has anticipate been been launch. activities of potential in we’ve customer quiet the the we’ve we from the customer interest about just increasing an the of can how begun and of we’d order the strategically launch set anticipate prepared reason been out manufacturers why expect,

couple to relates messaging things. is it a important note it the and to As counter-detailing,

to doctors The first in when and to that will kept our that published, and quality who’ve that full data full products is been the we launch purposefully of the visibility board date sales expect so, dataset our have. of we have exposed head-to-head through force advisory meetings is, have this we anticipation

space is in This the that quality in as to Our premium reflective it. quality a high in pricing order a team data we’ve launch we’ve a is the brand brand confidence of and assembled generated. quality very management of high Jeuveau

premium reflective same You that they nature expect these doctors pricing when that will branding into practice. take on can their be the expect elements brands of quality the

quality continue has the been As this designed we the May at months broader Dermatology there to company is and uptake that we doctors of doctors details the ongoing the really that upcoming close the that’s where product provide hold we’ll of last we building this customer the launch an our higher many nearly advisory talent combination are an a is believe you first a will they want hasn’t the look market. decade increasing to we engagement think and end, on, launch. of and amount together the market where Day, had that with doctors over or that the aesthetical of the Academy category. in there in part for that the that to six engaged in here attended Investor board event and evening neurotoxin about interest and There a and bringing spring the are the Jeuveau. a launch space have operate dedicated in American company or the profile of XXX that meeting the in broader we solely In to plans come will this product of been The introduce be to

Lauren Silvernail

two With and What our folks would this expect we is release, either of quarters months. we on us number do cash XX regard will the look those with solid in consumers this up lot Thanks, What runway, are pleased hope financing. third to this physicians to try second and helpful. very in of to the qualitative great that market by Lauren. we to is revenue guidance we product, tell question. David, trajectory that’s pick fourth revenue when and And do of a be encourage not quarter putting like you at anticipate the after year a quarter, is to book the we as On

into cash enough the launch we Going to drug. had it,

Now in we a comfortable position. are very

guidance to this have our burn for year. provide full on We not decided rate

to cash that know for for unable very last, time but will asking. thanks long let a how extended am in it of puts I and So an you solid period us position

Louise Chen

you. Thank right. All

Operator

you. Thank

question Annabel Please next Stifel. ahead. Our comes Samimy from go from

Annabel Samimy

Hi, taking thanks my for question.

the probably the discounting already a couponing, already, this clearly maybe you degree with and and already competitors a certain Now, the front coupons addressed you’ve the had are bit physicians. to more starting the providing messaging little on commercial to but

avoid you out in are there that of about how But, at is to AAD at a be And you’ve what the it that this. some bit a of we a that use of being go certain commoditization So, talk you seems expected are physicians degree. anything to market? avoid it’s can some you seeing little seeing bound know now a talk can the to a if I are already out going little careful and about what you you there, among Because then, point, it that’s and – game separately, are me to branding bit like might had that you’ve to to start chance many and that of marketplace. seems what’s

that getting willingness on physicians that’s recognition you give the from the a sense their of covenants consumer the some us a the for us that about finally own use brand a brand their you. from And that of we population, share you you source to Thank clearly the So, of can reception population? patient would of terms or Can have debt a the and the use side, not nice by those then, think with of in financing that’s are to and and brand fully recognized financing? key you.

David Moatazedi

you seeing of discounting point an increasing in and question as and the of of for and our commoditization category you concerns we from Annabel rose out, couponing competitors the point level you, excellent anticipation around launch. Thank surrounding this customer an are

in way the to shared that our In we our I brand and in market. mentality, this introduce, branding the how announcing position brand think our build the signals plan that in the advisory category that of a just on doctors but data and building terms quality is market. pricing aesthetic board meetings, focus taking these that technology leadership to we differentiated is we premium a the today, in we in the and platform brand our we are to this going space design-first that very of not as differentiated are go a with

you consumer out, category by to that’s And space, AAD, to with enter different not product and a product the of our strong consumers events, the customer adds to pharmaceutical our see aesthetic a And and a one can this been our been you see in of pharmaceutical entered a have positioning and premium the it amongst operates a pricing this the and step doctors to than give very can who you product to difference more the we the any on had awareness would as brand first you will the level to on start brands traditionally coming others. before focus they that have And at expect imagine I’ll company the that branding creativity at Evolus detail display in that the first as this relative opportunity was where exposed premium Evolus As an built space. built biggest building venue and some between you the through of space and as not that, that how were of reactions performance space the very from just reflective to was some we’ve operates beauty pointed the value debt. design of to was the on leadership turn unfold. the company a unfold announcing believe Lauren the low, with in companies as that doctors taken are and But then, with see other continues in that new mentality what today. attended today we of months, update to over to and

Lauren Silvernail

the any revenue cash Hi, $XX You subject regard earnings million Annabel. bet. not With the down covenants. minimum to or is we debt, senior drew to

you But can need reporting see to free. around covenant to to filed, close at is we when that Oxford. it’s look very the things you so, normal got there And X-K the we do to

it pleased operating normal covenants. than We are very the other about

Annabel Samimy

you Thank Great. so much.

Lauren Silvernail

You bet.

Operator

Koffler ahead. from Irina next Mizuho. [Operator Instructions] question you. from Please comes Thank Our go

Irina Koffler

the taking thanks Hi, for question.

delve just more. bit pricing into a the to So,

it’s are you patient, going but to offering some – then So discount the you it’s physicians. to the flexibility coupon have a patient be to and $XXX for

So get understand understand if list Is the because win, correctly, price. they that get to physicians, pricing off but a of slightly the – same they the also higher I way approximately discount correct a a strategy?

David Moatazedi

am the question great asked about pricing. you and Yes, I glad

is XXX which is list units. for So, of for Irina, the that’s a price vial. Jeuveau vial And $XXX that

on-label market above anticipate date and more this or loyalty we we market affordable price premium that is make introduce and some and point the That pay what for to leader end patients given your which depending on patient. use key units roll will that to patients in the of doctor depending for patient Jeuveau area. designed we chooses are to to different the know, this market to slight that here we less at once year, the course will the to as that, generated on in is come point doctors the of the the data you is the leader right. will premium slightly pricing then every We the doctor and cases parity terms our of quality program will XX the brand price market should injecting. heard exactly pricing in towards units Glabellar As out procedure bringing a we’ve varies the past in our that that The Jeuveau consumer the to receive not in In the charge the doctor we get Jeuveau pricing at of launch is the expect will end, market. we’ve indication to different volume-based levels

Irina Koffler

number middle two months? the toxin and Okay, can do year months, entry stay you year? XX two change with the the that maybe regard goal or positioning being within two long-acting end great. of at Does And you sometime towards then, how XX the next of market the number beyond number contemplate next of of your toxin to

David Moatazedi

it’s question. good Yes, a

the XX themselves generally that you find launches to establish category, this in product First, months. first XX in

as the against point that we of neurotoxins are we three time you window existing where that approved. So, out, have will compete FDA

stages future play will view provided review, currently on in outlook As a assume that we haven’t of are FDA and to market review how it the that relates out. under we various toxins of

distinction first will view As be their you dataset largest market there. of one of and aesthetics design that, the in this the management doing the frictionless to been In of will aesthetic-only platform and the category the business in in the believe delayed point have the give distinct that’s generate company first the team III be and quality to market. believe friction trials a value significant that’s coming though, preliminary we here is against a know, space. so Collectively, enter with a weeks. for Phase products those designed going you the space us dimensions end any advantage the it to we points to the from the we the quality consistently a entry And of is have that leader digital in to eliminate of amount in knows platform head-to-head that

Irina Koffler

you. Thank

Operator

Thank you.

Operator

David Our from Fargo. last go question Please comes ahead. from Maris Wells

David Maris

to afternoon. for written two Revance but analysts it a the at says has comparison level on issued not today claiming, to determined points a statement your and placebo duration Jeuveau a from in document, the Evolus the based threshold minutes against pre-BLA stage. that FDA stated to point Good been meeting design as feedback on the based is

first, So, wasn’t that? claiming familiar you with So that. had I been

glad that you’ve So was that. raised I

don’t had XX any month they months labeling? that. a labeling say labeling is a reason Revance week that The know Irina Allergan six to then or will expectation for six won’t think Thank about I will there think And your second get asked you. is and it. you give Is about what that or comment third, get they of earlier

David Moatazedi

on the Kaplan–Meier all, duration, endpoint endpoint. primary is two And the should point Yes, the first is FDA a thank XXXX, primary said, What has. in to something along of lines of the what a it’s guidance the we’ve be based reference of FDA stated question. you in composite. claims effectively for the And just

what looking The at we’ve it you kind all you and document. in see we what not either. pre-BLA that’s if are closely, I that that was document public or the So domain But claiming. that pre-BLA that’s heat of in that’s referring meetings Revance. are been to,

are bit can explain the is from there From And Revance into how go call, in of have a interpreting doesn’t that FDA. you. response duration through we conference in of little label just what have we in to a visibility they said ago the What confusion from claim and little they think don’t retreatment. our of and in I put – if in and detail I to call we should our label. about terms was how we the question our went while perspective, long give a we physicians patients terms a So think more try

they two over in and open-label studies were study, a XXX So year, what in the one. to And look when is times that their a the we patients patient course of was patients. most went lost or came kind patients which is The understand a our year. came cycle there thought label, to a what zero open-label in actually II doctors particular by retreatment our real and three very like and world at helpful in where for of Phase correction typical would study looking

informed was help that thought the label patients do. what clinicians understand after we all that So they to more and supposed is

what of into we that. really Your no or and is, have really Revance important question is and last not may I mean label may course read insight question their

the So answer question that we it’s that’s but for wouldn’t able question, a fair good to Revance folks. and be a responsibly

David Maris

much. very you Thank

Operator

concludes time, This Q&A Mr. call turn At this session. I’d like the you. to back Thank our to

remarks. for closing Treasury go Ashwin ahead. Relations Vice and Agarwal, Please Finance, Investor President,

Ashwin Agarwal

everybody participating call. in Thanks for Great. today’s

Operator

gentlemen for conference. program. the you. Ladies This today’s concludes attending Thank and

day. Good disconnect. all may You

Evolus (EOLS) 18 Mar 192018 Q4 Earnings call transcript