Welcome, everybody. Today, we have the pleasure of hosting Evolus. With me in attendance is Sandra Beaver, CFO of the company. Sandra, welcome, and thanks so much for making time for us at the conference. Perhaps before we dig into specific questions, maybe give a couple-minute overview of the latest and greatest and, perhaps any nuances that may be underappreciated. Sure. Sure. Thanks so much, Michael, and thank you very much for having us here. Evolus has a current commercial product called Jeuveau, which is a neurotoxin that competes with Botox. Jeuveau is a same molecule as Botox, however, it has a unique manufacturing process, which gives us some distinct advantages. In addition to that, we are the only cash pay-focused neurotoxin on the market today. That focus has enabled us to grow, be the fastest-growing neurotoxin for the past two years, and we're positioned to do that again this year, anticipating about 30% growth this year. The other things that that cash pay focus enables us to do is it enables us to approach our customers and our consumers differently than our competitors do. So we're able to offer co-branded marketing programs for our customers, things like ETV campaigns, billboards, digital campaigns, and we also have a consumer loyalty program that's a text-based program, very low friction, that's targeted at millennials. That program is run off of a digital platform that we've custom-built, which is also unique to us, so we have an infrastructure inside of Evolus that is very well-positioned to build a portfolio. We very excitingly licensed, in May of this year, a line of hyaluronic acid dermal fillers, so we'll be looking to put those into the market in 2025. We're very excited about the filler line. It's a complete line. It includes two nasolabial fold products, a mid-face product, as well as lips and eye products. With the addition of that line, it increases our total addressable market by 70%, so we now have the capacity to operate in a $4 billion market with our neurotoxin and our fillers. Got it. Now, thanks so much for that, Sandra. Just to start with, Jeuveau, obviously, since your launch in 2019, any color on how many aesthetic clinics have been penetrated, and what proportion of those were or are still Allergan clinics? Sure. So we estimate there to be about 30,000 clinics in the market today. That includes medical spas, dermatology practices, plastic surgeons. We currently are in about 11,600 of those clinics, so we're penetrated in about a third of the market. I certainly expect Allergan, having been in the market the longest, to be penetrated in the majority of those clinics, and whereas we're quite, underpenetrated. It gives us a great opportunity to continue to build share by increasing our penetration across those clinics. We're also at about 20%-25% share inside the clinics in which we are sold, so we have that opportunity to further penetrate within those clinics as well. Got it. So, I mean, what's been working? You guys have had a steady burn, incremental success penetrating these clinics since launch, but, what's worked well? What's not worked well? What's the sort of the fusion in terms of strategies to make further penetration into those clinics? Sure. I mean, I think it starts with having a great product, right? First and foremost, the practices have to be confident in the performance of the product and be comfortable, you know, promoting the product to their patients, and we feel very confident in the performance of Jeuveau. We've been able to work with practices very closely. We have what we call a MAC team. They're medical affairs clinicians that are going into practice and training injectors on the best way to use the product to help them feel more confident in using the product. But our cash pay focus actually gives us this distinct competitive advantage that no one else has, where we can partner with a practice to drive higher value into practice by offering that co-branded media, helping them build the practice with the use of our product, as well as the campaigns that we run with the product. We also have the consumer loyalty program. We have probably one of the most successful neurotoxin consumer loyalty programs in the market, and we continue to see increased adoption and usage of that program, bringing more and more consumers into practice. Got it. I can only imagine Allergan, I mean, is probably it probably is bundling a lot in these clinics to incentivize them to use our product. How are you combating that? I mean, you can't bundle right now. You only have one product in the market, but I assume with your fillers, and we'll talk about that later on, that would introduce some sort of leverage bundling-wise as well? Yeah, we'll certainly have the opportunity when the fillers go into the commercial market to provide a bundle to our customers, similar to some of our competition. I will say that our product itself and sort of the unique proposition that it presents gives the practitioner something they just don't get from Allergan. So you can look at pricing and think about the bundle, but I think you really have to look at the distinct advantages outside of just price. I don't think that's the only reason or the primary reason even often that a practice chooses a product. Mm. Our branding position is very focused on beauty. You know, we see this as a beauty procedure, not a medical treatment, and we want consumers and customers to feel that, and you see that happening in the market. You see more and more millennials entering the market, and our brand positioning, as well as our, you know, low-friction interfaces, are very much targeted at that millennial consumer, which is the highest-growing user of neurotoxins in the market today. A practice's goal is to build their practice and attract those customers, and we're giving them the tools to do that in a way that nobody else is. Got it. Now, does your strategy, marketing strategy differ for older generations that came before the millennials, or is it all the same? Yeah, I mean, our branding is consistent across. We don't have a brand for one and, you know- Got it different brand for another. Certainly, the conversation that a practitioner might have with a patient who's a long-term user of another product and working with them to switch products will differ from that they're having with a new customer. Mm. We certainly position better with a new patient, but I think there's uniqueness to the offering that we have that is equally compelling to a patient who's interested in switching. Got it, got it. In terms of what you think the greater expansion opportunity is, in terms of whether it's greater in one area versus the other, i.e., is it greater in medical spas versus opposed to plastic surgeries? Any comments or thoughts on that and where the most room to grow may be? Yeah, I mean, we over-index today in med spas. I do think med spas are well capitalized in the market. I think you're continuing to see influx of investment as they continue to expand and grow, as we've seen over a number of years, which positions us very well to leverage that growth for our own growth, you know, as in partnership. But that doesn't discount the value of the derm and the plastic, right? They're still an important part of the market, and we believe our offering is equally suited across all channels. Got it. Got it. And also more of kind of a macro question, just, are you seeing any impact of the looming recession in terms of, like, attracting new customers? I mean, millennials, they're just starting their careers. They don't maybe have as much disposable income as older generations. What have you been seeing in terms of those dynamics? Yeah, we get this question quite a lot. I think that there has been sort of economic indicators that are negative for some of the medical procedures, particularly those at a higher price point. And so there's a concern related to whether or not there's a share of wallet conversation that happens when choosing to get your neurotoxin. What we're seeing and finding is actually an incredibly healthy market. There is extreme resilience to the toxin procedure as a favored procedure in practice, and there's a couple of reasons for that. You know, one being it's probably the most economical procedure you can get in a medical aesthetics practice. The range of the price point is around $300-$500. You can sort of dial back your dosage, but not necessarily want to skip. You know, I think of it a lot like your hair color. You know, anyone who's getting a toxin, when that toxin wears off, they know it's worn off. You know, the wrinkles very definitively come back- Mm-hmm. And there's a desire to make sure that doesn't happen. And so there's a likelihood that they're going to prioritize that investment the same way they'd prioritize their hair color or their haircut, because it's a relatively modest price point, and there's a very obvious sort of effect change that they're seeing. And so the consumer does tend to continue to make sure they're coming in and getting their neurotoxin procedure, and I think that's contributing to the resilience of the market performance on the procedure. In addition to that, we seem to do very well in this market when there's a bit of a competitive pressure in terms of economics, because the practice may be feeling a bit of a pinch on other procedure volume going down, and they're going to trade to value, and we provide a more comprehensive value proposition to our practices than others do. We are at a slight discount to Botox. However, I think that the differentiation is the co-branded media, the ability to defray that marketing expense that a practice might make. We're making that on their behalf, and also to drive growth into their practice by driving in new patients. Got it. I'm going to preface my next question by saying I recognize this could be a delicate subject, but I'd be remiss if I don't ask. In terms of the discount rate, I mean, any to the extent that you can, any color on the discount rate relative to Botox and yeah, let's start there. Yeah, sure. Yeah. So we launched the product at a roughly 25% discount to Botox when we went into market. We've narrowed that gap. It's closing to closer to 20% discount to Botox. Our price isn't what differentiates us as a product. So what we've seen over the last couple of years since the launch is we've been able to continuously raise price as we've continued to build the brand recognition for Jeuveau and continued to expand the offering to the practice. So we continue to see actually upside for us on price. It's relatively modest, but we do think that there's an opportunity there for us to continue to narrow that price gap. Got it. Got it. Also too, in terms of switches, I mean, do you, do you track switches from, like, Botox to Jeuveau? Is that even trackable? I mean, any color, any feedback on how that's going? Yeah, so we can't track it for the broad population. We can track it for those in our consumer loyalty program. Mm-hmm. So when folks sign up for the consumer loyalty program, they can distinguish whether or not they're an existing user and what they might have been using prior to. They obviously aren't required to answer the question either. So, we do continue to see patients switch. You know, the highest switch rate comes from Botox. I don't think that would be any surprise, given that they are the market leader in terms of usage. Mm-hmm. But we also do over-index on some, on new patients. Got it. Got it. In terms of launch, I mean, top-line expectations into 2024, I know you haven't given guidance yet, but any color there in terms of what we could expect? What we have guided on is our 2028 revenue projection. Right. Our 2028 revenue projection is guided to $700 million. That would equate to a 29% CAGR over the 5 years upcoming, right? Mm-hmm. That should give you a sense of sort of how to model out the years in between. Yeah. So you're right, we have not guided to 2024, but I think, you know, our analysts understand us well. We have eight analysts that follow us. We've given enough long-range perspective that folks have, you know, built out a reasonable view of next year. Got it, and right now, just consensus using the latest FactSet estimates, has you becoming profitable in 2025. That's right. With your new line of fillers that are going to be hitting the market, any possible way that could be sooner, or? Yeah, so- Yeah when we started this year, we didn't have the dermal fillers, right? So we had guided to $500 million in 2028 as compared to that $700 million, and we actually had guided to profitability this quarter, Q4 of 2023. On the toxin alone, we are ahead of our plan to reach that, right? We've raised our guidance twice this year already. Mm-hmm. We started at $180-$190 revenue. We're now at $194-$198. And so without the investments that we were making, and we are making some this year as well, in the filler, that toxin business would achieve profitability, and we define that as non-GAAP operating income profitable, Q4 2023. And we'll sustain that. So really what's happening is those filler investments are what bring- are what's bringing us temporarily below profitability until we start generating revenue from the filler- I see in 2025. 2025, and that's when the first line, or maybe the first two lines of those five fillers will be coming to market. That's correct. Yeah. Yeah, so the nasolabial fold products will come to market in 2025. Okay, I just want to drill down, maybe focus now on the extra strength Jeuveau formulation. I know you have got data comparing 40 units Jeuveau versus 20 units Jeuveau, and also Botox. It shows about a delay of about one month in terms of returning to baseline glabellar lines. My question is, is one month enough for patients to make the change to take a double dose? Yeah. So if you look at our label today, right? So it's a 20-unit dose, and it's 4 months duration. So absent sort of head-to-head view on the 20-40, that, that you kind of get an average of 4 months duration. Mm. What we saw with the 40-unit dose is you get an average of 6 months duration, so it's about a third longer. It's not twice, right? So it's not double the dose, double the duration. Mm. You do get extended duration, but it's not double. I think, you know, for patients that are more concerned with ensuring that they have that duration, you know, you have some that are interested in six months because they're snowbirding it for the summer, and they're not coming back to their doctor for six months, or they're not, you know, very, price sensitive in terms of what they're putting into their toxin, that this has a use, right? We do see it as being a sort of small share of the market. Our original estimates were it could be up to 20%. We now think it looks like it could be around 10%. So there's a consumer that wants this product. They're not very price sensitive. They have specific reasons for being interested in a longer-acting toxin, but we see that as being a very small share of the total market. You mentioned price sensitivity. Could this extra strength Jeuveau be a lot more expensive than regular- It's the same product. Same price? Yeah. So to be very clear, it's the exact same vial that you're getting today, that you're using for 20 units. It's a reconstitution at a lower amount of saline. Mm-hmm and an increase of the dosage that's actually administered to the patient. In terms of price, though, for that extra dose, I mean, how should we think about that? It really comes down to how do practices want to price it, right? So do they want to offer it at the same per unit price, or do they want to price per area? I see. Do they then want to maybe give a different price for that particular area? That's the challenge that the practices face with giving longer duration, is that it potentially comes at the cost of practice margin. Got it. Also, too, I'm looking at the Revance DAXXIFY data, their 40 units. So your data is pretty much in line with their data in terms of, you know, return to baseline in terms of the glabellar lines. I mean, how should you think about that competitive dynamic between you and DAXXIFY? Yeah, I mean, I think what it shows you is that dose and duration are correlated, right? So ours is slightly better than theirs, but I agree with you. They're in the range of, you know- Right the idea here being with when you give a higher dose, you do get a longer duration. And like I said, we think the market for the long-acting toxin is relatively small. Daxi has taken a launch approach as a premium product, and then since then, they've now repriced their product. And I think they're still, you know, going through growing pains that they're figuring out in terms of where they position their product in the market and, and how it fits. We have a product that gives you the opportunity to have the best of both worlds. We have a toxin that can clearly be used at multiple dosing levels- Mm-hmm and very clearly in which areas of the face. Okay. Switching now towards Evolus and their filler segment. Perhaps elaborate on the ways in which Evolus differs from Juvederm and Restylane and all the other fillers on the market. I will do my best, right? Mm-hmm. I'm not our Chief Medical Officer, so just bear with me here. So it's a hyaluronic acid dermal filler, which is the highest used fillers in the market today. What Evolysse does, and what Symatese, our partner, does is they've figured out a way to cross-link the hyaluronic acid at very, very low temperatures. So all of the other hyaluronic acids are cross-linked at a high temperature, which creates fragmentation in the hyaluronic chain, which breaks down a bit of the sort of resilience of the filler itself. Mm. What Symatese has figured out how to do is how to create that hyaluronic acid linkage with these BDDE at a very, very cold temperature, like below freezing temperature, which preserves more—more of the hyaluronic acid chain, reducing the fragmentation and enabling a lower rate of sort of fragments in the product, as well as a... He always goes like this, like it's a pillow. Like, Mm-hmm but higher sort of resiliency of the hyaluronic acid. Got it. This is me speculating, but, like, once that product is manufactured by its cold process, and then it goes on doctor's shelves, where it's stored at room temperature, any risk in that? No, none whatsoever. those properties becoming altered? None whatsoever, no. Okay. Okay, and it's something I touched upon in the beginning of our conversation in terms of, I guess, these fillers, this suite of fillers will ultimately provide you bundling leverage, I presume. I mean, do you foresee that kind of jump-starting and causing a major inflection in sales because of the bundling leverage that may happen? Yeah, I mean, I think with, like, with any product in this space, first and foremost, the product has to be a good product, right? And we think we've got an exceptional product here. Symatese has a long history. They were the developers of Restylane, which is one of the leading products in the market today. Rui Avelar, who is our Chief Medical Officer, is the one that got Juvederm approved at Allergan, right? So we've got a very strong feeling about the quality of this product, and feel that that's sort of the starting point for working with the practice on product adoption. Mm. It's not bundling. You don't start with: Hey, I can give it to you cheap. You know, you start with: This is a fabulous product that's gonna give you great outcomes for your patients. And then you have the opportunity to think about how do you want to bundle pricing with your practice. So the inflection point, it becomes the adoption and the quality of the product, in my opinion. I see. I see. And in terms of the marketing costs associated with these fillers, I mean, any additional expenses that could be unforeseen or not presumed, not assumed for this new product line or no? No. I mean, we've certainly modeled out the expenses, and we've given some guidance ranges on what that looks like, right? One of the great things about adding a hyaluronic acid filler to our product portfolio is you can literally drop it in the bag of the same sales force. Right. We also have the digital platform, which gains a lot of leverage for us in terms of access to our customers as well as our consumers. So there's a very, very modest lift on operating expense for what is a high-value revenue opportunity for us. There will be launch expenses associated with the filler, so there'll be, you know, sampling, there'll be marketing, there'll be training, for sure. Yeah that goes along with it. Those will be largely concentrated around the filler launch itself, and we've given a framework as to what those investments might look like. Got it. Well, I think we're out of time now, but, Sandra, thank you so much for spending time with us. This has been immensely helpful. Yes. Wish you luck in the future. Thank you so much. Thanks for having us, Michael. Thank you. Appreciate it.