Aug 10, 2020
Evolus Reports Second Quarter 2020 Results and Provides Business Update
Q2 2020 Net Revenue $7.8 Million, Up from $2.3 Million in Q2 2019
“We experienced a rapid recovery of our business in the second quarter. Approximately 90 percent of our net revenue was generated in the second half of the quarter as offices re-opened from COVID-19 related shutdowns,” said
Second Quarter 2020 Financial Results
- Net revenues were
$7.8 million, up from $2.3 millionin the second quarter of 2019.
• Approximately 90% of net revenue was generated in the second half of the second quarter of 2020.
• Jeuveau® launched in the second half of the second quarter of 2019.
- Gross margin percentage was approximately 75%, up from 71% in the second quarter of 2019.
- GAAP operating expenses decreased by 34% to
$24.7 millionfrom $37.6 millionin the second quarter of 2019. Included in operating expenses for the second quarter of 2020 were $3.0 millionof restructuring costs associated with headcount and other expense reductions announced in April 2020.
- Non-GAAP operating expenses decreased by 44% to
$18.3 millionfrom $32.9 millionin the second quarter of 2019. Non-GAAP operating expenses in the second quarter of 2020 exclude expenses resulting from the revaluation of the contingent royalty obligation of $2.4 million, stock-based compensation of $2.4 million and depreciation and amortization of $1.7 million. Non-GAAP operating expenses in the second quarter 2019 exclude expenses resulting from the revaluation of the contingent royalty obligation of $1.3 million, stock-based compensation of $2.5 million and depreciation and amortization of $1.0 million.
- GAAP loss from operations decreased by 48% to
$18.9million from $36.0 millionin the second quarter of 2019.
- Non-GAAP loss from operations decreased by 60% to
$12.4 milliondown from $31.3 millionin the second quarter of 2019.
- GAAP net loss decreased by 44% to
$21.1 millionfrom $37.6 millionin the second quarter of 2019.
- Cash, cash equivalents and short-term investments as of
June 30, 2020were $84.8 million.
July 2020, the Company received a $40.0 millioninvestment from its strategic partner, Daewoong Pharmaceutical Co. Ltd. in the form of a five-year, unsecured, subordinated, 3% convertible note at a conversion price of $13.00.
- Pro forma cash¹ position was
$124.8 millionas of June 30, 2020.
- As of June 30, 2020, the Company had 33.7 million shares of common stock outstanding.
Key 2020 Business Highlights
- Strong underlying market demand for Jeuveau® in the second quarter of 2020 driven by an 8% increase in purchasing accounts to over 4,400 accounts2 and re-order rates2 increased to 66%.
- Launched two key marketing initiatives in May:
• Evolus Rewards, a consumer loyalty program providing patients with improved affordability and instant savings. As of
June 30, 2020, greater than 1,300 purchasing accounts opted into the program and over 16,500 patients enrolled.
Evolus350˚, a post COVID-19 promotional program offering customers a $350per vial price when the purchase is made via the Evolus Practice app.
July 6, 2020, the Company announced that the Administrative Law Judge (ALJ) overseeing the United States International Trade Commission(USITC) case filed by Allergan and Medytox in January 2019against Daewoong and Evolusreleased a Notice of Initial Determination. The non-binding initial decision by the ALJ finds a violation of Section 337 of the Tariff Act of 1930. All aspects of the ALJ’s ruling are subject to review by the Commission itself. The final determination is targeted for November 6, 2020. Jeuveau® launch and product supply are unaffected by the initial determination.
2020 Financial Outlook
Evoluscontinues to anticipate its non-GAAP operating expenses for the second half of 2020 will be less than $42 million. See “Use of Non-GAAP Financial Measures” below for additional information about this forward-looking non-GAAP financial measure. Evolusexpects its cash, cash equivalents and short-term investments will be sufficient to fund its operations for at least the next twelve months.
The Company’s financial outlook is based on a number of assumptions and subject to uncertainties. In the event that USITC affirms the initial determination of the ALJ by entering a limited exclusion order preventing us from importing Jeuveau® into
Conference Call Information
Management will host a conference call and webcast to discuss Evolus’ financial results today at
A replay of the call will be available following its completion through
A live audio webcast of the call will be available on the Investor Relations page of the
Evolus is a performance beauty company with a customer-centric approach focused on delivering breakthrough products. In 2019, the U.S. Food and Drug Administration approved Jeuveau® (prabotulinumtoxinA-xvfs), the first and only neurotoxin dedicated exclusively to aesthetics and manufactured in a state-of-the-art facility using Hi-Pure™ technology. Jeuveau® is powered by Evolus’ unique technology platform and is designed to transform the aesthetic market by eliminating the friction points existing for customers today. Visit us at: www.evolus.com.
This press release contains forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements that relate to the status of regulatory processes, future plans, events, prospects or performance and statements containing the words “plans,” “expects,” “believes,” “strategy,” “opportunity,” “anticipates,” “outlook,” “designed,” or other forms of these words or similar expressions, although not all forward-looking statements contain these identifying words. The company’s forward-looking statements include, but are not limited to, statements made by
Forward-looking statements are based on current estimates and assumptions made by management of the company and are believed to be reasonable, though they are inherently uncertain and difficult to predict.
Forward-looking statements involve risks and uncertainties that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements. Other factors that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements include uncertainties associated with our ability to continue to import Jeuveau® into, and sell Jeuveau® within,
Use of Non-GAAP Financial Measures
Evolus’ financial results are prepared in accordance with accounting principles generally accepted in
For a reconciliation of our historical non-GAAP operating expenses and non-GAAP loss from operations presented herein to GAAP operating expenses and GAAP loss from operations, the most directly comparable GAAP financial measures, please see “Reconciliation of GAAP Operating Expenses and GAAP Loss from Operations to Non-GAAP Operating Expenses and Non-GAAP Loss from Operations” in the financial schedules below. In addition, this press release includes information regarding the company’s expected non-GAAP operating expenses for the third and fourth quarters of 2020.
Jeuveau® is a registered trademark of
Hi-Pure™ is a trademark of Daewoong Pharmaceutical Co, Ltd
2 Represents cumulative statistics from the launch of Jeuveau® in
Vice President, Finance, Investor Relations &
Statements of Operations and Comprehensive Loss
(Unaudited, in thousands, except loss per share data)
|Three Months Ended
||Six Months Ended
|Cost of sales (excludes amortization of intangible assets)||1,948||660||6,167||660|
|Selling, general and administrative||17,553||34,892||48,852||52,411|
|Research and development||145||509||653||2,862|
|Revaluation of contingent royalty obligation payable to Evolus Founders||2,433||1,269||(7,451||)||6,182|
|Depreciation and amortization||1,658||978||3,407||1,462|
|Total operating expenses||24,745||37,648||48,417||62,917|
|Loss from operations||(18,887||)||(35,997||)||(36,282||)||(61,266||)|
|Other income (expense):|
|Loss before income taxes:||(21,127||)||(37,794||)||(40,606||)||(63,292||)|
|Income tax expense (benefit)||(2||)||(227||)||254||(14,750||)|
|Other comprehensive gain (loss):|
|Unrealized gain (loss) on available-for-sale securities, net of tax||(206||)||52||13||43|
|Net loss per share, basic and diluted||$||(0.63||)||$||(1.37||)||$||(1.21||)||$||(1.77||)|
|Weighted-average shares outstanding used to compute basic and diluted net loss per share||33,733||27,409||33,727||27,370|
Summary of Balance Sheet Data
(Unaudited, in thousands)
|Balance Sheet Data:|
|Cash and cash equivalents||$||29,772||$||109,892|
|Total cash, cash equivalents and short-term investments||$||84,754||$||129,803|
|Total current liabilities||$||19,462||$||24,439|
|Total stockholders’ equity||$||43,603||$||79,457|
Reconciliation of GAAP Operating Expenses and GAAP Loss from Operations to
Non-GAAP Operating Expenses and Non-GAAP Loss from Operations
|Three Months Ended
||Six Months Ended
|GAAP operating expenses||$||24,745||$||37,648||$||48,417||$||62,917|
|GAAP loss from operations||$||18,887||$||35,997||$||36,282||$||61,266|
|Revaluation of contingent royalty obligation||2,433||1,269||(7,451||)||6,182|
|Included in selling, general and administrative||2,338||2,282||4,878||4,026|
|Included in research and development||36||175||124||429|
|Depreciation and amortization||1,658||978||3,407||1,462|
|Non-GAAP operating expenses||$||18,280||$||32,944||$||47,459||$||50,818|
|Non-GAAP loss from operations||$||12,422||$||31,293||$||35,324||$||49,167|