Evolus(US:EOLS)2020-08-11 00:27Financial Data and Key Metrics Changes - The company reported net revenue of $7.8 million for Q2 2020, with approximately 90% generated in the second half of the quarter [13][25] - Non-GAAP operating expenses were reduced by approximately 37% compared to the prior quarter, totaling $18.3 million [12][27] - The non-GAAP net loss for Q2 2020 was $12.4 million, a 26% reduction from $22.9 million in the prior quarter [30] - Cash burn during Q2 was cut in half to $15 million from $30 million in the prior quarter [31] Business Line Data and Key Metrics Changes - The launch of Jeuveau has been successful, achieving the number 3 market share position in the U.S. aesthetic market [13] - Orders taken via the digital App platform nearly doubled compared to prior quarters, with over 4,400 purchasing accounts [12][12] - The Evolus Rewards program saw nearly 30% of the customer base opt-in within 30 days of launch, with over 16,000 patients enrolled [21][21] Market Data and Key Metrics Changes - The overall aesthetic market was likely down approximately 50% in Q2 2020 due to COVID-19, but a recovery is expected in the third and fourth quarters [39][41] - The company noted that younger demographics, particularly millennials, are increasingly engaging in aesthetic procedures, which is a favorable long-term trend [41][79] Company Strategy and Development Direction - The company has focused on creating a more efficient operating model and leveraging its digital platform to support customers [10][24] - Evolus introduced a stimulus program called Evolus 350, offering flat pricing to customers, which has been a key driver of success [11][17] - The company plans to launch in Europe in 2021, with a focus on aesthetics and potential new products in the pipeline [25][94] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the U.S. toxin category in the latter half of the year, despite not expecting a return to 2019 levels [39][42] - The company remains confident in its ability to achieve profitability on a lower revenue base, contingent on continued strong sales of Jeuveau [30][52] - Management highlighted the importance of resolving the ITC case by November 6 as a significant catalyst for shareholder value [35][74] Other Important Information - The company celebrated the one-year anniversary of Jeuveau's launch, marking it as a success across all measures [13] - The gross margin percentage for Q2 2020 was strong at 75%, with expectations for it to depend on sales levels and promotional activity going forward [26][26] Q&A Session Summary Question: Market share and recovery expectations - Management indicated that the overall aesthetic market was likely down about 50% in Q2, with expectations for gradual recovery but not returning to 2019 levels [39][45] Question: ITC case and profitability path - Management noted that it is not uncommon for the ITC to rule against the ALJ, and they remain confident in overturning the decision [49][50] - The company has significantly reduced its operating expense base, allowing for a clearer path to profitability without additional capital raises [51][52] Question: Consumer loyalty program and competitive landscape - The Evolus Rewards program has seen high adoption rates, and management expects it to result in higher gross margins compared to previous couponing strategies [60][61] - Management welcomed increased competition in the market, believing it will raise awareness and benefit all players in the category [88] Question: Demographic impacts on recovery - Management reported that millennials have not been disproportionately affected by COVID-19 and are expected to represent a larger portion of the aesthetic market in the coming years [78][79] Question: Updates on Nuceiva and cash spend - The company plans to launch Nuceiva in Europe next year, and cash spend is being managed carefully in light of the ITC case [94][96]