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Evolus(EOLS) - 2025 Q1 - Earnings Call Transcript
2025-05-07 21:30
Evolus (EOLS) Q1 2025 Earnings Call May 07, 2025 04:30 PM ET Speaker0 Good afternoon, everyone, and thank you for standing by. Welcome to Evolus' First Quarter Earnings Conference Call. As a reminder, today's conference is being recorded and webcast live. All participants are in a listen only mode. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Narek Sargarian, Vice President and Head of Global Investor Relations and Corporate Commun ...
Evolus(EOLS) - 2025 Q1 - Quarterly Report
2025-05-07 21:02
PART I - FINANCIAL INFORMATION [Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited financial statements for Q1 2025, detailing Evolus's financial position, operational results, and cash flows [Financial Statements Overview](index=6&type=section&id=Financial%20Statements%20Overview) This overview presents the company's balance sheet, statement of operations, and cash flows for the quarter ended March 31, 2025 Condensed Consolidated Balance Sheet (as of March 31, 2025) | Metric | March 31, 2025 (Unaudited) ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $67.9 million | $87.0 million | | Total current assets | $131.7 million | $151.3 million | | Total assets | $213.4 million | $232.6 million | | **Liabilities & Equity** | | | | Total current liabilities | $56.2 million | $63.0 million | | Total liabilities | $220.0 million | $227.0 million | | Total stockholders' equity (deficit) | ($6.6 million) | $5.5 million | | Accumulated deficit | ($628.3 million) | ($609.4 million) | Condensed Consolidated Statement of Operations (Three Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Total net revenues | $68.5 million | $59.3 million | | Gross profit | $46.7 million | $40.5 million | | Loss from operations | ($15.2 million) | ($8.9 million) | | Net loss | ($18.9 million) | ($13.1 million) | | Net loss per share, basic and diluted | ($0.30) | ($0.22) | Condensed Consolidated Statement of Cash Flows (Three Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($15.6 million) | ($10.6 million) | | Net cash used in investing activities | ($1.9 million) | ($0.8 million) | | Net cash provided by (used in) financing activities | ($1.6 million) | $45.7 million | | Change in cash and cash equivalents | ($19.1 million) | $34.1 million | [Note 1. Business Overview and Liquidity](index=11&type=section&id=Note%201.%20Description%20of%20Business%20and%20Liquidity) Evolus, a beauty company, focuses on Jeuveau® and new HA fillers, maintaining sufficient liquidity despite recurring net losses - The company's main product is Jeuveau® (prabotulinumtoxinA-xvfs) It is expanding with the Evolysse™ line of HA fillers, launching two products in the U.S. in April 2025 and planning a European launch in the second half of 2025[31](index=31&type=chunk) - The company has a history of recurring net operating losses, recording a net loss of **$18.9 million** for the three months ended March 31, 2025, and had an accumulated deficit of **$628.3 million**[33](index=33&type=chunk) - In March 2024, a follow-on offering raised net proceeds of **$46.8 million** Management believes current capital is sufficient for the next 12 months, further supported by a new **$250 million** loan agreement with Pharmakon executed in May 2025[34](index=34&type=chunk)[36](index=36&type=chunk) [Note 7. Term Loans](index=24&type=section&id=Note%207.%20Term%20Loans) A new $250 million term loan agreement with Pharmakon, maturing in May 2030, enhances financial flexibility and reduces interest rates - On May 5, 2025, the company entered into an Amended and Restated Loan Agreement with Pharmakon, increasing its borrowing capacity to **$250 million**[126](index=126&type=chunk) - The new loan facility matures on May 5, 2030, and accrues interest at 3-month SOFR (with a 3.5% floor) plus 5.0% per annum, a reduction from the previous rate[126](index=126&type=chunk) - The initial **$150 million** tranche was drawn on May 5, 2025, which included refinancing the previous **$125 million** loan and providing **$23.4 million** in net proceeds from **$25 million** of incremental borrowings[126](index=126&type=chunk) [Note 9. Commitments and Contingencies](index=26&type=section&id=Note%209.%20Commitments%20and%20Contingencies) This section details significant future purchase and milestone payment obligations, alongside ongoing shareholder derivative litigation - The company must meet minimum annual purchase requirements under its agreements with Daewoong and Symatese to maintain exclusive distribution rights[133](index=133&type=chunk)[135](index=135&type=chunk) - Future milestone payments to Symatese are required, including up to **€12.1 million** for U.S. approvals (2025-2028) and **€3.1 million** for European approvals (triggered in October 2024)[136](index=136&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - A shareholder derivative lawsuit filed in 2020 remains stayed The court dismissed a related securities class action in favor of the defendants in October 2024[141](index=141&type=chunk) [Note 10. Stockholders' Equity](index=28&type=section&id=Note%2010.%20Stockholders'%20Equity) This note outlines common stock outstanding, ATM offering program, equity incentive plans, and unrecognized stock-based compensation - In March 2024, the company completed a follow-on offering, issuing **3.554 million shares** and raising **$46.8 million** in net proceeds[34](index=34&type=chunk)[147](index=147&type=chunk) - An "at-the-market" (ATM) sales agreement is in place to sell up to **$50 million** of common stock, but no shares have been sold under this program to date[149](index=149&type=chunk) - As of March 31, 2025, total unrecognized stock-based compensation cost was **$56.7 million**, which is expected to be recognized over a weighted-average period of 2.6 years[165](index=165&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, operational performance, liquidity, and capital resources, noting revenue growth despite losses [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q1 2025 saw net revenue growth driven by Jeuveau® sales, but increased SG&A led to a larger operating loss Results of Operations Comparison (in millions) | Metric | Q1 2025 ($) | Q1 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Revenues | $68.5 | $59.3 | 15.5% | | Gross Profit | $46.7 | $40.5 | 15.3% | | Selling, general and administrative | $56.6 | $45.1 | 25.5% | | Loss from operations | ($15.2) | ($8.9) | 70.8% | | Net Loss | ($18.9) | ($13.1) | 44.3% | - The **$9.2 million** (**15.5%**) increase in net revenue was primarily attributed to higher sales volumes of Jeuveau®[175](index=175&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **$11.5 million** (**25.5%**), mainly due to higher personnel costs related to commercial activities[177](index=177&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by recent financing and a new loan facility, despite historical losses and ongoing cash requirements - As of March 31, 2025, the company had **$67.9 million** in cash and cash equivalents and an accumulated deficit of **$628.3 million**[183](index=183&type=chunk)[184](index=184&type=chunk) - A follow-on offering in March 2024 provided net proceeds of **$46.8 million**, and an additional **$4.2 million** was raised in April 2024 from the exercise of underwriter options[185](index=185&type=chunk) - A new Amended and Restated Loan Agreement with Pharmakon was executed on May 5, 2025, providing access to up to **$250 million** in financing, extending maturity to 2030, and reducing the interest rate[187](index=187&type=chunk) - Material cash requirements include debt service, royalty payments on Jeuveau® net sales to the Evolus Founders (until Q2 2029) and Medytox (until Q3 2032), and milestone payments for the Evolysse™ products[188](index=188&type=chunk)[190](index=190&type=chunk)[205](index=205&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details market risks from interest rate and foreign currency fluctuations, with no material changes reported - The company's main market risks are from fluctuations in interest rates and foreign currency exchange rates[209](index=209&type=chunk) - No material changes in financial market risks were reported since the Annual Report for the year ended December 31, 2024[210](index=210&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were effective as of March 31, 2025, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025[211](index=211&type=chunk) - No material changes to the company's internal control over financial reporting were identified during the first quarter of 2025[213](index=213&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal proceedings, including a stayed shareholder derivative lawsuit and a books and records demand - A shareholder derivative lawsuit filed in 2020 remains stayed A related federal securities class action was dismissed in the company's favor in October 2024, and the dismissal was not appealed[141](index=141&type=chunk) - The company received a demand to inspect its books and records in 2021 from a putative stockholder, with allegations similar to the derivative suit The outcome remains uncertain[142](index=142&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section outlines principal risks, including financial losses, intense competition, reliance on third parties, and intellectual property challenges [Business and Strategic Risks](index=45&type=section&id=Business%20and%20Strategic%20Risks) Key strategic risks include historical losses, intense competition, market adoption uncertainty, and cybersecurity threats - The company has a history of significant losses, with an accumulated deficit of **$628.3 million** as of March 31, 2025, and its ability to achieve profitability is not certain[219](index=219&type=chunk) - The company faces significant competition from large, experienced companies with greater financial resources, brand recognition, and broader product portfolios that can be bundled and discounted[220](index=220&type=chunk) - The business is reliant on its digital technology, and any system failures or cybersecurity incidents could disrupt operations and harm customer relationships[244](index=244&type=chunk)[246](index=246&type=chunk) - Future growth depends on successfully in-licensing or acquiring additional products, a complex and competitive process[257](index=257&type=chunk) [Reliance on Third Parties and Supply Chain Risks](index=58&type=section&id=Reliance%20on%20Third%20Parties%20and%20Supply%20Chain%20Risks) The company's critical reliance on sole-source licensors for manufacturing and regulatory compliance poses significant supply chain risks - The company is completely dependent on its license agreements with Daewoong and Symatese; termination or loss of rights under these agreements would materially harm the business[276](index=276&type=chunk) - Evolus relies solely on Daewoong to manufacture Jeuveau® and Symatese for Evolysse™, making it vulnerable to any production, quality, or regulatory issues at its partners' facilities[277](index=277&type=chunk) - The company is dependent on Symatese to achieve and maintain regulatory approval for the Evolysse™ product line in the U.S. and Europe Any delays or failures by Symatese in this process would negatively affect Evolus's ability to sell these products[228](index=228&type=chunk)[229](index=229&type=chunk) [Intellectual Property and Legal Risks](index=59&type=section&id=Intellectual%20Property%20and%20Legal%20Risks) This section covers intellectual property infringement risks, reliance on licensors for IP protection, and Medytox royalty obligations - The company faces the risk of third-party intellectual property infringement claims, which could prevent or delay commercialization efforts and lead to substantial litigation costs[283](index=283&type=chunk) - Evolus relies on its licensors, Daewoong and Symatese, to maintain, protect, and defend the intellectual property related to its products, as it does not own the core patents[287](index=287&type=chunk)[290](index=290&type=chunk) - The Medytox Settlement Agreements require ongoing royalty payments that reduce profitability Failure to comply with the agreements could result in litigation or the loss of the ability to market and sell Jeuveau®[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) [Regulatory and Compliance Risks](index=63&type=section&id=Regulatory%20and%20Compliance%20Risks) Extensive government regulation, off-label promotion risks, and the need for ongoing regulatory approvals pose significant compliance challenges - The business is subject to extensive, complex, and costly government regulation by the FDA and other global authorities, and failure to comply can lead to severe penalties[306](index=306&type=chunk) - Marketing and promotion are strictly limited to approved indications If the company is found to have improperly promoted off-label uses, it could face significant fines, penalties, and damage to its reputation[251](index=251&type=chunk)[253](index=253&type=chunk) - Obtaining and maintaining regulatory approvals in foreign jurisdictions is necessary for international marketing and is a complex, time-consuming, and uncertain process[316](index=316&type=chunk)
Evolus(EOLS) - 2025 Q1 - Quarterly Results
2025-05-07 20:07
Financial Performance - Total net revenues for Q1 2025 were $68.5 million, a 15.5% increase compared to Q1 2024, driven by higher volumes and market share gains[5]. - Total net revenues for Q1 2025 were $68,522,000, an increase of 15.5% compared to $59,333,000 in Q1 2024[22]. - Product revenue increased to $68,074,000 in Q1 2025, up from $58,964,000 in Q1 2024, representing a growth of 15.5%[22]. - Gross profit for Q1 2025 was $46,655,000, compared to $40,503,000 in Q1 2024, reflecting a gross profit margin of 68.1%[28]. - The net loss for Q1 2025 was $18,892,000, compared to a net loss of $13,109,000 in Q1 2024, indicating a 43.9% increase in losses[22]. - GAAP operating loss for Q1 2025 was $15.2 million, compared to $8.9 million in Q1 2024[12]. - Non-GAAP operating loss for Q1 2025 was $5.5 million, compared to $0.9 million in Q1 2024[12]. - Non-GAAP loss from operations for Q1 2025 was $5,530,000, compared to a loss of $856,000 in Q1 2024[32]. - The company reported a basic and diluted net loss per share of $0.30 for Q1 2025, compared to $0.22 in Q1 2024[22]. Membership and Market Growth - The number of accounts purchasing Jeuveau increased by 675 in Q1 2025, totaling over 16,000 accounts and achieving over 50% account penetration in the U.S.[7]. - Evolus Rewards™ membership grew by over 80,000 to over 1.1 million, representing a 39% increase compared to Q1 2024[7]. Product Launch and Future Guidance - Evolysse™ launched in April 2025 and is off to a strong start, with early metrics indicating strong interest and adoption[6]. - Evolysse™ and Estyme injectable HA gels are anticipated to contribute 8% to 10% of total revenue for the full year 2025[6]. - Full-year 2025 revenue guidance is reaffirmed at $345 million to $355 million, representing 30% to 33% growth over 2024 results[12]. - The company aims for total net revenue of at least $700 million by 2028, reflecting a compound annual growth rate of 27% from 2024[12]. Cash and Assets - Cash and cash equivalents as of March 31, 2025, were $67.9 million, down from $87.0 million on December 31, 2024[12]. - Cash and cash equivalents decreased to $67,894,000 as of March 31, 2025, down from $86,952,000 at the end of 2024[24]. - Total assets decreased to $213,361,000 as of March 31, 2025, compared to $232,569,000 at the end of 2024[24]. - Total stockholders' equity (deficit) was $(6,604,000) as of March 31, 2025, down from $5,522,000 at the end of 2024[24]. Operating Expenses - Operating expenses rose to $61,827,000 in Q1 2025, up from $49,425,000 in Q1 2024, marking a 25.1% increase[30].
Evolus(EOLS) - 2024 Q4 - Earnings Call Presentation
2025-03-05 04:20
Business Overview - Evolus aims to make the beauty experience delightful and achievable[9] - The company is building a brand focused on the younger demographic[11] - Evolus operates a unique cash-pay business model powered by strong digital capabilities[11, 34] Market Position and Growth - Jeuveau's share of the toxin market has grown to 13% in 2024[13] - The total addressable market expands by 78% with the addition of injectable HA gel portfolio[11] - The neurotoxin and filler markets are projected to grow to approximately $10 billion by 2028[15, 16] - Evolus International is expected to achieve $100 million in 2028[18] Financial Performance - The company anticipates total net revenues for 2025 to be between $345 million and $355 million[23, 114] - Evolysse and Estyme injectable HA gels are expected to contribute 8-10% of the total net revenue in 2025[103, 114] - Evolus projects at least $700 million in total net revenue and a non-GAAP operating income margin of at least 20% by 2028[115, 117]
Evolus(EOLS) - 2024 Q4 - Earnings Call Transcript
2025-03-05 11:33
Financial Data and Key Metrics Changes - In Q4 2024, global net revenue was $79 million, a 30% increase over Q4 2023 [31] - Full-year global net revenues reached $266.3 million, representing a 32% increase over 2023, exceeding the guidance range [31] - The company achieved profitability for the full year, one year ahead of expectations, with non-GAAP operating income of $6.7 million in Q4 2024 [36][29] Business Line Data and Key Metrics Changes - The US product revenues accounted for approximately 95% of total sales, with a customer reorder rate of about 70% [31] - The company added over 2,900 new accounts in 2024, bringing the total to more than 15,000 purchasing accounts [10] - Evolys Rewards surpassed 1.1 million users, growing 40% over the prior year [10] Market Data and Key Metrics Changes - The US market share approached 14% by the end of 2024, reflecting a consistent gain in market share [80] - The total addressable market for the company is approximately $6.2 billion today, expected to grow to around $10 billion by 2028 [40] - International revenue contribution is anticipated to increase, with the company targeting $100 million in international revenue by 2028 [11] Company Strategy and Development Direction - The launch of Evolys is a top priority, with plans to commercialize in early Q2 2025 [13] - The company aims to achieve at least $700 million in revenue by 2028, with a non-GAAP operating income margin of at least 20% [20] - The company is focusing on integrating Evolys into its existing portfolio, leveraging its cash pay model and consumer rewards [17] Management's Comments on Operating Environment and Future Outlook - Management noted a healthy market for toxins, with continued consumer interest and growth expected in the mid to high single digits [51] - The company is optimistic about the impact of the GLP-1 label on consumer interest and market dynamics [52] - Management expressed confidence in achieving profitability and positive non-GAAP operating income for the full year 2025 [42] Other Important Information - The company achieved a reported gross margin of 66.7% in Q4 2024, consistent with Q4 2023 [32] - Operating expenses grew at a rate less than half that of revenue, demonstrating continued operating leverage [34] - The company ended Q4 2024 with $87 million in cash, reflecting strong sales growth and efficient cash collection [37] Q&A Session Summary Question: How does the company view the market conditions for US facial injectables? - Management acknowledged challenging market conditions but noted strong growth in the toxin market and consumer interest, particularly among younger generations [47][48] Question: What are the early metrics for the Club Evolys subscription program? - Management reported good results from the initial rollout of the subscription program, with plans to evaluate its performance after a full year [56][58] Question: What are the growth expectations for the US toxin market in 2025? - Management projected a healthy growth rate for the toxin market, with expectations of mid to high single-digit growth [68] Question: How does the company differentiate its new fillers? - The company highlighted the unique Coldex technology used in Evolys, which offers better stability and performance compared to competitors [72][75] Question: What are the expectations for international revenue growth? - Management indicated that international revenue is expected to grow significantly faster than US revenue, contributing a larger share over time [93]
Evolus(EOLS) - 2024 Q4 - Earnings Call Transcript
2025-03-05 04:18
Financial Data and Key Metrics Changes - In 2024, the company achieved global net revenue of $266.3 million, a 32% increase over 2023, exceeding the guidance range of $260 million to $266 million [31] - The fourth quarter revenue was $79 million, reflecting a 30% increase compared to Q4 2023 [31] - The company reported a gross margin of 68.5% for the full year, with an adjusted gross margin of 69.6%, consistent with guidance [32] - Non-GAAP operating income for Q4 was $6.7 million, a significant improvement from a loss of $3.7 million in Q4 2023 [36] Business Line Data and Key Metrics Changes - The company added over 2,900 new accounts in 2024, bringing the total to more than 15,000 purchasing accounts, representing half of the toxin market [10] - The US market share approached 14% by the end of 2024, exceeding previous guidance [80] - The Evolys injectable gels are expected to contribute 8% to 10% of total revenue in 2025 [41] Market Data and Key Metrics Changes - The total addressable market for the company's products is approximately $6.2 billion, projected to grow to $10 billion by 2028 [40] - The company anticipates the US toxin market to grow in the mid to high single-digit range through 2028 [51] Company Strategy and Development Direction - The launch of Evolys is a top priority, with plans to commercialize in early Q2 2025 [13] - The company aims to achieve at least $700 million in revenue by 2028, with a non-GAAP operating income margin of at least 20% [20] - The company is focusing on integrating Evolys into its existing portfolio, leveraging a cash pay model and co-branded media benefits [17] Management's Comments on Operating Environment and Future Outlook - Management noted that despite challenging market conditions, the toxin market has shown consistent growth, particularly among younger consumers [48] - The company expressed confidence in its ability to capture market share and drive growth through innovative products and strategic partnerships [82] - Management highlighted the importance of the new weight loss label for Evolys, which is expected to attract new patients [52] Other Important Information - The company achieved profitability for the full year 2024, one year ahead of its goal [7] - The Evolys injectable gels utilize proprietary Coldex technology, which is expected to differentiate them from competitors [22] Q&A Session Summary Question: How does the company view the market conditions for US facial injectables? - Management acknowledged challenging market conditions but noted strong growth in the toxin market, particularly among younger consumers [48] Question: What are the expectations for the subscription model's performance? - The subscription model has shown good early results, but the company plans to wait for a full year cycle before sharing detailed metrics [56] Question: What are the growth expectations for the US toxin market in 2025? - Management projected a healthy growth rate for the toxin market, with expectations of mid to high single-digit growth [68] Question: How does the company plan to train accounts for the new Evolys products? - The company has developed a comprehensive training program and plans to train a significant number of accounts quickly [102] Question: What is the significance of the weight loss label for Evolys? - The weight loss label is expected to be a powerful marketing tool, attracting new patients seeking facial injectables [52]
Evolus, Inc. (EOLS) Q4 Earnings and Revenues Lag Estimates
ZACKS· 2025-03-04 23:25
Company Performance - Evolus, Inc. reported quarterly earnings of $0.01 per share, missing the Zacks Consensus Estimate of $0.06 per share, compared to a loss of $0.14 per share a year ago, representing an earnings surprise of -83.33% [1] - The company posted revenues of $78.95 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.08%, but showing an increase from year-ago revenues of $61 million [2] - Over the last four quarters, Evolus has not surpassed consensus EPS estimates, although it has topped consensus revenue estimates two times [2] Stock Performance - Evolus shares have increased by approximately 29.9% since the beginning of the year, while the S&P 500 has declined by -0.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.04 on revenues of $71.81 million, and for the current fiscal year, it is $0.21 on revenues of $351.93 million [7] Industry Outlook - The Medical - Products industry, to which Evolus belongs, is currently in the top 36% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry performance can significantly impact stock performance [5][8]
Evolus(EOLS) - 2024 Q4 - Annual Report
2025-03-04 21:40
Part I [Business](index=7&type=section&id=Item%201.%20Business) Evolus is a global performance beauty company focused on cash-pay aesthetics, offering Jeuveau® and launching Evolysse™ fillers [Products and Product Candidates](index=7&type=section&id=Item%201.%20Business%20-%20Products%20and%20Product%20Candidates) Evolus's portfolio includes commercial neurotoxin Jeuveau® and upcoming Evolysse™ HA fillers Evolus Product Pipeline Overview | Product Line | Status | Description | Treatment | Approvals | Estimated 2028 Market Size | | :--- | :--- | :--- | :--- | :--- | :--- | | **Jeuveau®** | Commercial | Injectable botulinum toxin type A | Temporary improvement of frown lines | U.S. (2019), Canada (2018), EU/UK (2019), Australia (2023), Switzerland (2023) | U.S.: $4.3B, Europe: $1.0B | | **Evolysse™** | Launching in 2025 | Portfolio of injectable hyaluronic acids | Improvement of nasolabial folds, mid-face volume, lip fullness, etc. | EU (2024 - 4 products), U.S. (2025 - 2 products) | U.S.: $1.8B, Europe: $1.0B | - The company anticipates launching Evolysse™ Form and Smooth in the U.S. in the second quarter of 2025 and all four approved products in Europe in the second half of 2025[23](index=23&type=chunk) - Premarket approval (PMA) is being sought from the FDA for Evolysse™ Sculpt and Lips, with expected U.S. launches in 2026 and 2027, respectively[23](index=23&type=chunk) [Market Opportunity and Strategy](index=8&type=section&id=Item%201.%20Business%20-%20Market%20Opportunity%20and%20Strategy) Facial injectables market projected to reach **$14.5 billion** by 2028, aligning with Evolus's aesthetic-only strategy - The facial injectables market, consisting of neurotoxins and hyaluronic acid gels, is estimated to be **$10.9 billion** in 2024 and is expected to grow to **$14.5 billion** in 2028[26](index=26&type=chunk) - The company strategically focuses its marketing efforts on the millennial segment, which it believes views aesthetic treatments as integral to personal health and self-care[27](index=27&type=chunk) - A key strategic pillar is pursuing an aesthetic-only strategy, as Jeuveau® is currently the only U.S. commercialized neurotoxin without a therapeutic indication, which the company believes enhances marketing and pricing flexibility[29](index=29&type=chunk) [Manufacturing and Supply Agreements](index=9&type=section&id=Item%201.%20Business%20-%20Manufacturing%20and%20Supply%20Agreements) Evolus relies on third-party manufacturers Daewoong for Jeuveau® and Symatese for Evolysse™ under exclusive agreements - Daewoong manufactures Jeuveau® under a license and supply agreement that requires Evolus to make minimum annual purchases to maintain exclusivity[31](index=31&type=chunk)[33](index=33&type=chunk) - Symatese manufactures Evolysse™ under two separate agreements for the U.S. and Europe, both with 15-year initial terms and minimum purchase requirements to maintain exclusivity[32](index=32&type=chunk)[35](index=35&type=chunk)[38](index=38&type=chunk) [Competition](index=11&type=section&id=Item%201.%20Business%20-%20Competition) Evolus faces intense competition in neurotoxin and dermal filler markets from larger, well-resourced companies - The U.S. aesthetic neurotoxin market has six approved products, including Jeuveau®, with primary competitors being BOTOX®, Dysport®, Xeomin®, Daxxify®, and Letybo®[40](index=40&type=chunk)[42](index=42&type=chunk) - The U.S. dermal filler market, where Evolysse™ will compete, includes major product lines like Juvéderm®, Restylane®, Belotero®, and RHA®[41](index=41&type=chunk)[43](index=43&type=chunk) [Government Regulation](index=12&type=section&id=Item%201.%20Business%20-%20Government%20Regulation) Evolus operates under strict global regulations, with Jeuveau® as a biologic and Evolysse™ as a Class III medical device - In the U.S., biologic products like Jeuveau® require a Biologics License Application (BLA) from the FDA, while medical devices like Evolysse™ require premarket review, typically a Premarket Approval (PMA) for Class III devices[47](index=47&type=chunk)[49](index=49&type=chunk)[55](index=55&type=chunk) - In the European Union, medical devices must obtain a CE mark to be marketed. The EU Medical Device Regulation (EU MDR), which has replaced the previous directive, imposes stricter requirements and requires all products to undergo review and approval under the new regulations[67](index=67&type=chunk) - The company is subject to data privacy and security laws, including HIPAA in the U.S. and the General Data Protection Regulation (GDPR) in the EU, which govern the handling of personal and health information[72](index=72&type=chunk) [Human Capital](index=17&type=section&id=Item%201.%20Business%20-%20Human%20Capital) Evolus employs 332 full-time individuals, with 57% women, focusing on competitive compensation and an inclusive culture - As of December 31, 2024, the company had **332** full-time employees, with **57%** being women[75](index=75&type=chunk) - The company's total rewards strategy includes competitive base pay, bonus/commission, long-term equity incentives (Stock Options and RSUs), and a robust benefits package[77](index=77&type=chunk) - Evolus promotes an inclusive culture through an employee-led Culture & Belonging Council and provides diversity, equity, and inclusion training[79](index=79&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) Evolus faces risks including financial losses, intense competition, supply dependence, IP litigation, funding needs, and regulatory compliance [Business and Strategic Risks](index=19&type=section&id=Item%201A.%20Risk%20Factors%20-%20Business%20and%20Strategic%20Risks) Business risks include financial losses, intense competition, market adoption uncertainty, economic downturns, cybersecurity, and capital needs - The company has a history of significant losses, recording a net loss of **$50.4 million** for the year ended December 31, 2024, and an accumulated deficit of **$609.4 million**[84](index=84&type=chunk) - Jeuveau® and Evolysse™ face significant competition from large, experienced companies like AbbVie and Galderma, which have greater financial resources, brand recognition, and larger product portfolios[85](index=85&type=chunk) - The company may require additional financing to fund operations, and a failure to obtain capital on acceptable terms could force it to delay, limit, or reduce its commercialization and development efforts[96](index=96&type=chunk) - The business relies on digital technology, including the Evolus Practice App, and could suffer from system failures or cybersecurity incidents, which have become more sophisticated and frequent[107](index=107&type=chunk)[109](index=109&type=chunk) [Risks Related to Licensors and Suppliers](index=31&type=section&id=Item%201A.%20Risk%20Factors%20-%20Risks%20Related%20to%20Licensors%20and%20Suppliers) Evolus is entirely dependent on sole-source licensors and suppliers, facing risks from agreement termination and manufacturing disruptions - The company's ability to commercialize Jeuveau® and Evolysse™ is completely dependent on its agreements with Daewoong and Symatese, respectively. A breach or termination of these agreements would be materially adverse[138](index=138&type=chunk)[139](index=139&type=chunk) - Evolus relies solely on Daewoong to manufacture Jeuveau® and Symatese to manufacture Evolysse™. Any production problems or failure to comply with cGMP regulations by these partners could disrupt supply and lead to regulatory sanctions[140](index=140&type=chunk)[141](index=141&type=chunk) - Inaccurate forecasting of product demand could lead to inventory issues, such as excess inventory that expires or inadequate supply to meet customer orders, negatively affecting financial performance[145](index=145&type=chunk) [Intellectual Property Risks](index=33&type=section&id=Item%201A.%20Risk%20Factors%20-%20Intellectual%20Property%20Risks) IP risks include infringement claims, reliance on licensors for core IP protection, and challenges in defending rights globally - Third-party claims of IP infringement could prevent or delay commercialization efforts. The medical aesthetic field has large patent portfolios, and litigation is common[146](index=146&type=chunk) - The company relies on its licensors (Daewoong and Symatese) to protect key intellectual property, as botulinum toxin itself is not patentable, only its manufacturing process. A failure to protect these trade secrets and patents would harm the business[150](index=150&type=chunk) - Protecting intellectual property rights globally is expensive and challenging, as the laws of some foreign countries offer less protection than in the United States[158](index=158&type=chunk) [Regulatory and Legal Risks](index=37&type=section&id=Item%201A.%20Risk%20Factors%20-%20Regulatory%20and%20Legal%20Risks) Regulatory and legal risks include complex global regulations, uncertain approvals, post-approval compliance, and shareholder litigation - The business and its products are subject to extensive and costly government regulation in the U.S. and abroad. Failure to comply can result in sanctions, fines, or product recalls[168](index=168&type=chunk)[169](index=169&type=chunk) - Obtaining regulatory approval for new product candidates is not guaranteed and is an expensive, lengthy process. The FDA and other authorities have substantial discretion and can delay, limit, or deny approval for many reasons[170](index=170&type=chunk)[175](index=175&type=chunk) - The company is subject to prohibitions on promoting products for off-label uses. If found to have done so, it could face significant fines, penalties, and damage to its reputation[115](index=115&type=chunk) - The company is a defendant in shareholder derivative lawsuits, which could result in substantial costs and divert management's attention, even if the claims are unsuccessful[191](index=191&type=chunk) [Risks Related to Common Stock](index=41&type=section&id=Item%201A.%20Risk%20Factors%20-%20Risks%20Related%20to%20Common%20Stock) Common stock risks include price volatility, potential dilution from future sales, no dividend policy, and anti-takeover provisions - The trading price of the company's common stock has been volatile, ranging from a low of **$9.99** to a high of **$17.49** during the year ended December 31, 2024[192](index=192&type=chunk) - Future sales of common stock by the company, including through its ATM program, could depress the market price and dilute existing shareholders[196](index=196&type=chunk)[198](index=198&type=chunk) - Anti-takeover provisions, such as a staggered board and prohibitions on stockholder action by written consent, may prevent or frustrate attempts by stockholders to change management or effect a takeover[199](index=199&type=chunk)[200](index=200&type=chunk) - The company has never paid dividends and does not expect to in the foreseeable future, with earnings intended to be retained for business growth[207](index=207&type=chunk) [Unresolved Staff Comments](index=49&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved written comments from the Securities and Exchange Commission staff - None[212](index=212&type=chunk) [Cybersecurity](index=49&type=section&id=Item%201C.%20Cybersecurity) Evolus maintains a cybersecurity risk management program with Board oversight, reporting no material incidents to date - The company's cybersecurity program is managed by the SVP of IT and Operations, with oversight from the Chief Financial Officer and the Board of Directors[216](index=216&type=chunk)[217](index=217&type=chunk) - The program includes systems for infrastructure security, employee training, third-party risk management, and an incident response plan[213](index=213&type=chunk)[214](index=214&type=chunk) - To date, the company does not believe its business has been materially affected by any identified cybersecurity threats or incidents[215](index=215&type=chunk) [Properties](index=49&type=section&id=Item%202.%20Properties) Evolus leases its corporate headquarters in Newport Beach, CA, with the lease extended to January 2030 - The company leases its corporate headquarters in Newport Beach, CA. The lease was recently amended to add space and extend the term to January 31, 2030[218](index=218&type=chunk)[219](index=219&type=chunk) [Legal Proceedings](index=50&type=section&id=Item%203.%20Legal%20Proceedings) A securities class action was dismissed in Evolus's favor, while a related derivative lawsuit remains stayed - The securities class action lawsuit against the company and certain officers was dismissed, with a final judgment entered in the company's favor in October 2024[220](index=220&type=chunk) - A shareholder derivative lawsuit, alleging similar facts, remains stayed. The company believes the complaint is without merit but cannot estimate a potential range of loss[221](index=221&type=chunk)[222](index=222&type=chunk) - The company received a books and records demand from a putative stockholder related to similar allegations, the outcome of which is uncertain[223](index=223&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[225](index=225&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Evolus common stock trades on Nasdaq (EOLS); the company has never paid dividends and retains earnings for growth - The company's common stock trades on the Nasdaq Stock Market under the symbol "EOLS"[228](index=228&type=chunk) - As of February 28, 2025, there were approximately **24** holders of record of the common stock[229](index=229&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future, retaining earnings for business growth[230](index=230&type=chunk) [[Reserved]](index=54&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - [Reserved][236](index=236&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net revenues grew 32% to **$266.3 million** in 2024, with net loss improving to **$50.4 million** [Results of Operations](index=56&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20-%20Results%20of%20Operations) Net revenues increased 32% to **$266.3 million** in 2024, with gross profit margin stable at 68% and net loss improving Comparison of Operations (2024 vs. 2023) | (in millions) | 2024 | 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total net revenues** | $266.3 | $202.1 | $64.2 | 32% | | **Gross profit** | $182.3 | $137.6 | $44.7 | 32% | | Gross profit margin | 68% | 68% | - | - | | **Loss from operations** | $(34.4) | $(49.2) | $14.8 | (30)% | | **Net loss** | $(50.4) | $(61.7) | $11.3 | (18)% | Comparison of Operations (2023 vs. 2022) | (in millions) | 2023 | 2022 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total net revenues** | $202.1 | $148.6 | $53.5 | 36% | | **Gross profit** | $137.6 | $89.8 | $47.8 | 53% | | Gross profit margin | 68% | 60% | - | - | | **Loss from operations** | $(49.2) | $(65.3) | $16.1 | (25)% | | **Net loss** | $(61.7) | $(74.4) | $12.7 | (17)% | - The increase in gross profit margin from **60%** in 2022 to **68%** in 2023 was primarily due to reduced royalty obligations to Medytox, which were lowered to a mid-single digit percentage of net revenue starting in September 2022[254](index=254&type=chunk)[255](index=255&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20-%20Liquidity%20and%20Capital%20Resources) Evolus held **$87.0 million** in cash as of December 2024, supported by a **$46.8 million** equity offering and a **$125 million** term loan Cash and Liquidity Overview | (in millions) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $87.0 | $62.8 | | Working capital | $88.4 | $64.1 | | Stockholders' equity (deficit) | $5.5 | $(20.7) | - In March 2024, a follow-on offering raised net proceeds of **$46.8 million**, with an additional **$4.2 million** raised from the exercise of underwriter options in April 2024[266](index=266&type=chunk) - The company has a term loan agreement with Pharmakon, with **$125 million** drawn in total as of December 2023. The loan bears a variable interest rate of SOFR + **8.5%** and matures in December 2027[268](index=268&type=chunk)[269](index=269&type=chunk)[435](index=435&type=chunk) [Critical Accounting Policies and Estimates](index=66&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20-%20Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant estimates for revenue recognition and the valuation of the contingent royalty obligation - Revenue recognition requires significant estimates for sales-related adjustments, including volume-based rebates and the consumer loyalty program, which is treated as a separate performance obligation (material right)[295](index=295&type=chunk)[296](index=296&type=chunk)[382](index=382&type=chunk) - The fair value of the contingent royalty obligation payable to the Evolus Founders is a critical estimate determined using a discounted cash flow method (Level 3 inputs), based on projected net revenues, a discount rate, and timing of cash flows[297](index=297&type=chunk)[373](index=373&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Evolus faces market risks from interest rate fluctuations on its variable-rate loan and foreign currency exchange rates - The company is exposed to interest rate risk on its **$121.5 million** outstanding variable-rate term loan as of December 31, 2024[301](index=301&type=chunk) - Foreign exchange risk is primarily from exposure to the British pound and the EU euro, but has not been significant to date[302](index=302&type=chunk) [Financial Statements and Supplementary Data](index=69&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited financial statements for 2022-2024 received an unqualified opinion, with contingent royalty valuation as a critical audit matter - The report contains the audited Consolidated Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Stockholders' Equity (Deficit), and Statements of Cash Flows[305](index=305&type=chunk) - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting[308](index=308&type=chunk)[309](index=309&type=chunk) - The auditor identified the valuation of the contingent royalty obligation as a critical audit matter due to the challenging and subjective judgments involved in evaluating the projected net revenues of Jeuveau®[312](index=312&type=chunk)[314](index=314&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=106&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting or financial disclosure matters - None[506](index=506&type=chunk) [Controls and Procedures](index=107&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and auditors concluded that disclosure controls and internal control over financial reporting were effective as of December 2024 - Management concluded that disclosure controls and procedures were effective as of December 31, 2024[508](index=508&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2024, based on the COSO 2013 framework[509](index=509&type=chunk) - The independent registered public accounting firm, Ernst & Young LLP, issued an unqualified attestation report on the effectiveness of the company's internal control over financial reporting[510](index=510&type=chunk)[515](index=515&type=chunk) [Other Information](index=109&type=section&id=Item%209B.%20Other%20Information) The company reports no other information under this item - None[523](index=523&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=109&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[524](index=524&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=109&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[526](index=526&type=chunk) [Executive Compensation](index=109&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[528](index=528&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=109&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership and related stockholder matters are incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[529](index=529&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=109&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Related party transactions and director independence information is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[530](index=530&type=chunk) [Principal Accounting Fees and Services](index=109&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accounting fees and services information is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[531](index=531&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=110&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section provides an index of exhibits and financial statement schedules filed with the Form 10-K - This section contains an index of all exhibits filed as part of the Form 10-K, including material contracts, certificates of incorporation, and officer certifications[534](index=534&type=chunk) [Form 10-K Summary](index=113&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that no Form 10-K summary is provided - None[541](index=541&type=chunk)
Evolus (EOLS) Moves 5.5% Higher: Will This Strength Last?
ZACKS· 2025-02-14 14:57
Evolus, Inc. (EOLS) shares rallied 5.5% in the last trading session to close at $15.04. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 41.6% gain over the past four weeks.Evolus recorded a strong price increase after it announced the receipt of the FDA’s approval for Evolysse Form and Evolysse Smooth injectable hyaluronic acid (HA) gels, the first two products in the Evolysse collection. These approvals mark ...
Evolus (EOLS) Surges 28.3%: Is This an Indication of Further Gains?
ZACKS· 2025-01-22 13:51
Evolus, Inc. (EOLS) shares rallied 28.3% in the last trading session to close at $13.48. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3% loss over the past four weeks.The sharp upsurge in EOLS shares can be attributed to positive market sentiment surrounding the company’s impressive preliminary results and strong growth outlook. Evolus reported a strong preliminary Q4 2024 performance, posting $79 million ...