EOLS - Earnings call transcript Q1 2019

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Operator

Good day ladies and gentlemen and welcome to the Evolus conference call. At this time all participants are in a listen-only mode.

Following the management's prepared remarks, we will host a question-and-answer session and our instructions will be given 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 call Mr.

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

Ashwin Agarwal

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

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

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

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

David Moatazedi

update all Good afternoon you and thank XXXX for our first call. quarter joining

quarter During upcoming of of of Company key today's milestones performance. I and accomplishments our all first discuss before the we covers launch these On and Lauren, the call, to cover Jeuveau. milestones XXXX, will against the executed briefly quarter critical first financial our enable

we success. Aesthetic which the publication Surgery quarter Jeuveau This announced of critical aesthetic of largest is pivotal the publication the The in BOTOX, our head-to-head study launch the Journal. to trial and compared

The United have speak are data We results the the outstanding. new feedback believe on these has at results the in for neurotoxin medical themselves. head-to-head States to and community we first launch been

also published European the new announced a The opportunities endpoints European Nuceiva days anticipate the to Specifically filing. XX head-to-head in positive points. and the our new data CHMP evaluate secondary commercial and Last partnership Friday was critical We in continue approval data from Union. XX within for we exploratory opinion support Europe. to

quarter, efficacy the publication trial announced versus surgery placebo. of the pivotal our US validated Jeuveau III Phase During further which also dermatologic of safety we in and the

over X,XXX screened and XXX-person interview have a we We process candidates deployed We U.S. force. sales an our fully following hired force. now extensive sales

days. the now most are energized we meeting, team focus singularity our We clear the teams and have is field. is one launch the coming our composition experience. aesthetic sales our sales prepared experienced It execute most the of the with team. sales one With XX% pleased in fully have the and of our now of sales to following in national

position number our clear. months market goal of of two introducing XXX We is kilodalton to share within within States United the neurotoxin days years. the The path first in in of XX the XX are nearly launch achieving

With Xth. XXXX would Investor our highlights. more our to to will for turn strategy on market of our a and around QX provide at will May who review to Jeuveau now over provide financial the call I Lauren go that Analyst like specifics We Day

Lauren Silvernail

Thank $XXX.X investments afternoon XXXX. to of you end in David, and equivalents good had million quarter everyone. as short-term compared and cash $XX.X cash, million first At December of the the XX, we

the During with costs debt the XXXX, received drawing million Finance. $XX.X proceeds the of Oxford quarter upon down first discounts million of tranche and the of net of $XX issuance Company senior after first facility

million million of During operating the of including software and cash $XX.X FDA capitalized paid receiving million use various of approval less arrangements the under for upon milestone $XX.X quarter we payments Jeuveau. activities $XX.X

the our obligation million impact and milestone it As to in The $XX.X were R&D intangible impacting of relates payments $XX.X for these $X.X line sheet royalty remaining recorded of treatment assets. the milestones P&L. to million contingent expense balance accounting the million

an for As XXXX includes following first a income million ended benefit in $XX.X of is compared from million. was Daewoong of benefit XXXX. $X FDA loss first to as income due $X.X our of allowance quarter $XX additional approval. the quarter release first the an assets tax EU Net net the the first quarter was in million Jeuveau loss for reminder March for loss the of tax deferred by partial Net valuation a XXXX million This resulted tax of anticipated this a year. partner quarter XX, with the approved

operating non-GAAP QX were for million. $XX.X expenses Our

to and million, non-cash are a of three $X.X we $X.X including million depreciation it make non-GAAP amortization the compensation million. expense operating of stock-based of to obligation reevaluation royalty easier items, our contingent expenses of providing reminder and track a metric As $X

stated I here. during XXXX provide we our to earnings expense not launch guidance year-end on or As have call, decided this revenue

items However, highlight our and the for R&D QX there with upon annualized run rate would is you expenses $XX Based G&A, models. we XXXX approximately non-GAAP your to help financial a expense operating pre-launch million. like to few are

our and million. sales first Please have leadership adjustments $XX And between $XX expenses note And we revenue and will XXX%-person non-GAAP We described. to our note lower team GAAP primarily build experience the consisted our XXXX with provided be of increases that the annualized any turn expect I just importantly, quarter with fourth back selling most expenses previously our in loaded David. team. of do selling as include which hired to million sales over Please call to the were numbers customers. trials quarter back the as toward to we not non-GAAP

David Moatazedi

Thank you, Lauren.

turning work call prepare moment the Jeuveau. entire we over this for Before our pivotal to Q&A, like up would a I moment hard take to launch as for to thank their to team leading

days the TRANSPARENCY has from our clinical Over opinion gained U.S. our a FDA trial positive the published successfully XX data last and program. EU and CHMP approval, team U.S.

We America May We a American in and the we of Jeuveau market and launch forward beginning team JMP the for prepared of Operator. Plastic May our Q&A. Day Surgery at to plan Aesthetic June. plan of May in that commercial presence On at the our to including We investor Bank Jefferies attend significant go the With coming hope side these at to the U.S. sales see market for built over a strategy XXth. out to Xth. We on turn in the meeting look BMO call days. will XXX% one and and a SunTrust meetings, unveiling Analyst Investor number have Society commercial for and and I meetings. to of

Operator

from our first Louise Instructions] Thank of you, line come question Cantor [Operator Chen will sir. And Fitzgerald. the from

open. now is line Your

Louise Chen

I you specified. taking for questions. two my that had Thanks Hi.

the launch the trial I days seen from competitors? head-to-head full then had have with for Jeuveau physicians feedback to for through to of early who any in the have performance? what the early best launch versus customers measure its phase look you. track as us are second And question So, you you was at and the go do data metrics Thank the your

David Moatazedi

time. Great. will because by doctors they because bit to just we for we not what relative it's importance closer be on it representatives data of have have quite at consistency Jeuveau further the is commercialization our releasing enabled early now and how have the and endpoints, feedback also has of the the public be data to the and set. comprehensive the Company sitting is the And And the in call been thanks experience we but credentials such around performs look only feedback launch when the doctors over market and and brand domain. the a Louise. it able the data that back to for in call out having also able sales there doctors is any exploratory from for validates I feedback specifically XX leader present to that before And that set, it that addressing hear this the published questions the heard enabled answer And view data data start the helpful to to the right to a have.

I days, our early as Analyst that relates upcoming to the Day. the in measures answer Now save to for it will

around some indicators color strategy will those important day. go You of more get surrounding are and of And of color success our we for course that. to to lot will be market going the to more provide look on leading that a key and

Louise Chen

you. Thank

Operator

next SunTrust. the will from Gregg And question our come of Thank you. with line Gilbert

is Your open. now line

Gregg Gilbert

to because the strategy Maybe is term sort and your simple background easier have your given penetrate how afternoon. toxin sure many how I'm then one toxin singular patients of lot in Good of but that team of important bunch procedure I in from longer given on are of how a product terms for a standpoint, might Company is Thanks. in I short-term, a will I and but a your have questions one to on I'm thought of evolve. will you an existing cosmetic eventually share bucket bundle in it approach own? advantage sure market starts year now. the another? And new those your a can those focus term ability secondly punt know David us be you with have of than U.S. versus longer I think to pretty

is broad us give it what that that focus for can you maybe Thanks. strokes recognizing now? is your on some So

David Moatazedi

for Thanks the questions, Great. Gregg.

over there First reference, in just off you a the further of two few about well it customers appears two this with of million. market ASPS treatment have a sizing it's just are market population. especially them, an there patients as emerging they survey survey the hear, ASAPS market patients, get north influx we that that the in as what is side neurotoxin millennial can million the conversations In a There of and couple on and is we that the on sources is but based done U.S. new validate our with own of

so about hear quite we market accelerating. growth a And bit

know low believe double is we digits. this market you high As growing single

we you some within turnover XX% alone that category. there know is and So gets growth about the

coming back. annual to is XX% of is we'd manufacturers the are Obviously, on estimate space patients that to to with I very what this from they remainder XX% patients when other And anywhere category a new we what you'd the that for get So are treated an think existing and categories continue like not compare some you the find frequency all is sticky when consumers that see. basis to habit. in

think three back year category everyone coming times performs well average to procedures. because see on of satisfaction this high the patients a with very I patient likes but the

a enables As of us things it is new differently. relates force a we one out up our our key product. think focus excitement new we and idea. and focus, deal both things the doing a force company are sales our to is with There that amount our your sales great to of to and at Evolus energy for a second that focus customer stood regards around that national create and meeting question singularity how the our around as And really we and tremendous stand of with

you. course assessing XX that area value out information you is two And as once lot have share category we additional and as products of the will point first point is of that first of ourselves more and in we bag.” we we are have that with create and to so at that the considering past are we we couple we “in could player the a there as the with Now an actively establish of years committed get the launch number months,

Operator

Thank you.

Our of Irina next come the Mizuho. question Koffler with will from line

Your is now line open.

Irina Koffler

Hi. Thanks for taking the question.

media have first you if you are just is using stocking. start little order or stock that they they when information already pulling of in social are less So a maybe to stock bit that what to are are free sample site, can buying the comment a And you they on and from actually what And product quantity? on seeing or on some offices. have started just maybe your sites any as wondering physician some to we

David Moatazedi

accounts Great. Jeuveau And social media that have access would are shipped product. start of the we for are to gearing I something terms Thanks, of you but same that product. rumblings right, Irina. not posts in have we we heard up the the are either seeing thing with

in So Jeuveau. competitive very That said, levels is starting front US accounts market the Jeuveau is has nobody to in increasing this of being of interest as in access and notice you demand. get and to that there are

clinical are as also our patient advisory the starting mailers media data of the had been and how amount a that the they steady And to that here base. initially the chatter engagement think seeing we the and messaging so where high commercialization deployment we around sending has There their meeting in out buildup the the reflects that along to heavily those that formulate noise just with and then those basis several of days. hit are social plans. Jeuveau an in a to really ago us. And have and really significant science help that seeing around had we we level of increase meetings in you accounts to national their in on refine our focused patients, existing all-time now for then boards of launch. on field doctors And peers and weeks their the men positively that year our have started posts I XXX And has have all in And course our we that build regular with addition to in to last involved some toward customer coming their we were vision we speak to plan out the advertising launch

we the this so the And to market. enter for us is right prepare time as

Operator

come will with And Thank of question Annabel our next line Stifel. Samimy you. from

Your line is now open.

Annabel Samimy

my taking question. for Thanks Hi.

maybe mentioned seeing any market are is do that have best with two they use their give are XX% long-term growth their Galderma that that qualitative contracts. entrant about talked just it's is to customers expense haven't get you like lot endpoints. to ahead because of there certain from to talked good parting of expect XX then you a you some come some degree. at And a Allergan Merz, export from a the to serious clearly position So the if to had you really we might to growth. struck lock specific step-up your and counter-detailing data? part just -- with or strategies the about response pretty can incremental going you physicians have as what and the we You on strategy us What penetrate install their any part But is by and before new whether a quarter its head-to-head have of is to to number that other other

maintain all the the time zero no One to patient that of why one on there or heard the points. was push was backs we measure across

days things why various missing. XX Just is like

be that you. very around would helpful. Thank commentary any So

David Moatazedi

start seen counter-detailing. Okay. days out haven't anything with over the will hearing than XX great. we last really We prior. different were I

control meeting leaving ones messaging fact the relatively prior. data purposefully counter our ourselves light and to are both standpoint you that they addition anything what the we quiet isn't the enough from than go position of if the the to we with from the stayed in theme that could been conversation. market largely a there a strategy hadn't a competition. hearing to the That market these be to a So we consistent participated in does deliver data we around that And data in anyone simplicity are are us where know as feel in and and more strategically has reps in qualitative where it we the to the position else our the that fortunate first customers brings to dialogue

drawing launches their product. drawing What this we even data this and skepticism and on would doctors be form would is this that conclusions can and based how imagine likely the prior I they some delivers that may conclusions are the of around they without leave you that be confidence As compares own finding we is competitive hands. out and in accomplishes in brand It the of want and this saying its quality end getting data product to optimistic remain try and why objective. product in high this the it their in talks getting

Now across over Rui sitting will the as I me. it to data it turn I Rui have got points, relates address to those. to specific to

Rui Avelar

Sure.

add make compromised potentially about XX. our, studies - to there compliance believe, so So I at you second modeled if things that more really a at III you visits sites, drop-out. And why was are was the will we we that one in XX% the take from of there I the the XX% wanted the sure day first And we no Phase counterpoint we think look high completion. more our compliance. I had XX% Well

good strategy kind having high very drop And toxins of to much. traditionally seem strong data robust don't speaks XX set compliance. that to the day a out So of with at

is why why one thought manipulated inappropriate and that that that that is been understand And we XX, is zero one have we With in has zero be would meaningful been suggest regards we So way. always that we more day that. or question. counter-details interesting XXX an an on have there. to XXX, and I really

patients mean study. responder one responder the did very as that your is, did a look that then are your of subjects of by zero you a improvement to severe mean definition Because a only when metric, patients most at one-point a I most two-point moderate many severe have to that easy carefully you a you What is need definition. I you and how patients to or are what have moderate have. by need of many a to So responder. you If talk become how that you about demographics be improvement using using if be a baseline

one fast meters baseline inappropriate. XXX you run, that just are So to of understand the compare cannot Otherwise for trying is well, my dataset demographics against your are. and Most were you meters time severe. is unless what how specifically you compare and time like completely studies saying XXX our here’s another for

at look you of like the severe. study If were it's our XX% XXX mid patients

look at to most points. look comparing you you they want it's their only So a had when to and set compare as to two In only improve if you study to data words had two-point our improvement other compared zero, a like are at patients of one where point, improve we one moderate.

it is that different that, you or want as demographic that is an a comparison the to so when one. basically number should within lots be must So also out says use baseline explanation a a a that you Number if comparison study there because can of you zero to want things you head-to-head two, make study. one understand put are

across So you compare studies. can't

are zero answer that with to head-to-head. one is people yes. planning we the The have a asked or from So release

in endpoint head-to-head our was primary study our Importantly one. or a zero a

what XX, is XXX, release coming plan Now of we That the to study the at probably if XX, are day day you day XXX, wondering day X, steps. that. looks XXX rest day like out throughout a it day also

all there up. hiding, So is coming no it's

Operator

question Tsao Wainwright. of Instructions] with come Douglas you. line the will And H.C. our next Thank from [Operator

open. now is line Your

Douglas Tsao

Hi, for taking good afternoon. Thanks questions. the

sort of European then you announced are was obviously strategy. provide to question going you discussed? terms some pricing you just channel in from of imminently fourth feedback - your you in is get my earnings just you quarter I David second the And the were approval. what if curious the Just could call

find And Thank you. enough commercial of Just how supply potentially manufacturing to urgency that? have both monetize you is a sort also serve partner do or enough to long to your markets?

David Moatazedi

quite been pricing Great. hosting markets. team as the Thank know local strategy. questions. on road the that the you bit Doug I in start a will for with doctors dinners a we feedback with on leadership have I

commoditization Denver me the the pricing the an of premium want price As we, across quality the of The for a which is in ourselves tiers we to is around time that the so I very how Mike a the last see have. in feedback couple I And product to execute to introduced the with was was a fact consistent plan list doctors. sitting market they At and example that and know this premium table are to week. had our as disclosed our is program last doctors market brand in they different from course, thing pricing is the we establishes category. around Houston pleased specifics customers. we at pricing in cities have of same questions haven't a leader back who

You the we But that communicated Day. the have will our XX% to out the can model leader. past hear more relative as in discount the at you to about market XX% Investor in end

you And that XX% assume so XX% does as of this to naturally improve profile procedure. profitability the

their And to of they have taken on vial erosion price that message. that it. can the other of price XXX receptive the resulting that to a is then the on the also leader been side and history XXX market have of so from occurred relate And from all up the margin way end the customers to increases very

all year we focused is talk want lastly just we back to have the customer, have those not in the her. invest end in to the we category the growing And dimensions those. about come discounts that It's the the half two end about then manufacturers list or this the the in of on. it's are back so And will about In the which space. what price

back the of to we the there interest to in invest is of year. increase piece. our provide half loyalty we we color so affordability what treatment out. launch Shortly And that a to like And that be looks this introduced bit plan of her the plan through after program amount little that will like. the And else everything stage around in tremendous will in more

We that second diligent we is as manufacturers your different been before, area we we Europe, an European very a have in it assess question that had and provided potential around. input for footprint that cover partners of Europe. in as have the terms market relates have capabilities Now to that

Of our are United the for partner with can that the Clarion Canada. quality a is is partner States we one company and in course Evolus reflect looking that of that in

for looking we that color we high is closer for Yeah. more you as are bar will update around get will stage a and to something over midyear in have we those turn And around Lauren. what question that we we where Likely I the will so are to we provide approval on. discussions. The last it

Lauren Silvernail

Lauren comment One well. modeling is on as this Doug Silvernail.

are important it's we As understand partner. arrangements and in modeling to you our looking us at Europe a in Daewoong involve that partner when

we to U.S. ask So from a are modest very is standpoint or modeling because on the split. it three-way outside a you including make OUS sure everyone

at So arrangements of And Canada your question? this of third the remind would point our impact of us is P&L on outside international modest. you pretty

Douglas Tsao

both ability markets the in next your few years. of supply to over Just terms

Lauren Silvernail

not when at constrained are think look all. our at I we supply to ability we

US, Daewoong constructed Canada. obviously custom and supply a partner Our of this which approved and was plenty capacity product plant had Europe for

Douglas Tsao

Okay, great. you. Thank

Operator

And our of Maris with from Thank Fargo. you. come question next line the Wells David will

now Your line open. is

David Maris

you. brought your is one A the to just EU/CA up want is That clients gender of to think differences data? on competitors and afternoon. or that have things the questions. Thank that? trial Phase efficacy response couple of you III age couple any and what had in one of see of the a Good impact your Do the

Rui Avelar

the the Rui. question Sure. feel interpret free elaborate terms Please were I of This your so that to - patients majority of right. The in is female.

words know course responder to XX we XX. patients have under the lower of a rate. know tend other patients lower Of were rate that we have over and majority responder males a In that

number arms the onabotulinum product. patients the over between between who the balanced were in of Specifically was our XX two

pretty one-patient I top males, pretty was the my also different numbers. small was off think head similar, and in the of it there

was The look significant you the than was change weighting, how if Jeuveau are that more arm severe doesn't thing numbers had it BOTOX most things. small the the those overall actually probably So arm. to at

that that perspective look affected to something if there one of to our I result to severe point compared to them is and were the because is the that point of to that we So if as from disadvantage end an and may to probably have we more have course more BOTOX. is just

David Maris

Yeah.

the more males that they harder part to very that getting you which You the may having may bit but that little at treat. a is few because be and right, I was skew addressed patients is don't about age is slightly are there sounds average bit was marginal? the answers year you but [multiple what older speakers] older, is it a have though you question as I or said little had think impact it a which you think have any And

Rui Avelar

and actually actually XX the placebo, superiority statistical still especially two to the between those pretty We do sensitivity which asked Exactly are if a things look you arm are not. over the similar. over age did showed analysis is and at ends we where start tilt and the competitive to XX age

David Maris

Thank Great. very you much.

Operator

your today. disconnect. Thank Everybody participation may session Ladies gentlemen, This a question-and-answer for day. today's you. our and all conference. wonderful does conclude and our for concludes This thank we you have program on

Ashwin Agarwal	Vice President Finance and Investor Relations
David Moatazedi	President and Chief Executive Officer
Lauren Silvernail	Chief Financial Officer and Executive Vice President
Rui Avelar	Chief Medical Officer and Head of Research
Michael Mazen Jafar	Chief Marketing Officer
Louise Chen	Cantor Fitzgerald
Greg Gilbert	Suntrust Robinson Humphrey
Irina Koffler	Mizuho Securities
Annabel Samimy	Stifel, Nicolaus & Co
Douglas Tsao	H.C. Wainwright
David Maris	Wells Fargo

Evolus (EOLS) 30 Apr 192019 Q1 Earnings call transcript