Press Release
Oct 29, 2020
Evolus Reports Third Quarter 2020 Results and Provides Business Update
Q3 2020 Net Revenue of
Cash1 Position Increased Over Q2 2020 to
“We reported third quarter net sales above expectations and are pleased with the strong underlying fundamentals of our business. We continued to leverage our highly efficient business model, including reducing our operating expenses by 38 percent as compared to the third quarter of last year,” said
Third Quarter 2020 Financial Results
$17.7 million in total net revenues for the third quarter of 2020 consisting of$16.9 million ofU.S. Jeuveau® net revenue and$0.7 million of net revenue from international sales. Third quarter net revenue increased 34% over the third quarter of 2019.- Gross margin percentage was 72.5%.
- GAAP operating expenses decreased by 38% to
$21.6 million from$34.6 million in the third quarter of 2019. - Non-GAAP operating expenses decreased by 34% to
$19.3 million from$29.1 million in the third quarter of 2019. Non-GAAP operating expenses in the third quarter of 2020 exclude a gain resulting from the revaluation of the contingent royalty obligation of $2.5 million, stock-based compensation expense of $3.0 million and depreciation and amortization expense of $1.7 million. Non-GAAP operating expenses in the third quarter of 2019 exclude expenses resulting from the revaluation of the contingent royalty obligation of $1.8 million, stock-based compensation expense of $2.5 million and depreciation and amortization expense of $1.2 million. - GAAP loss from operations decreased by 65% to
$8.8 million from$25.1 million in the third quarter of 2019. - Non-GAAP loss from operations decreased by 67% to
$6.5 million from$19.6 million in the third quarter of 2019. - GAAP net loss decreased by 57% to
$11.5 million from$27.0 million in the third quarter of 2019. - Cash, cash equivalents and short-term investments as of
September 30, 2020 were $110.1 million, increased from$84.8 million as ofJune 30, 2020 . InJuly 2020 , the Company received a$40.0 million investment 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 . - As of September 30, 2020, the Company had 33.7 million shares of common stock outstanding.
“We saw the Jeuveau® launch trends accelerate as the market continued to rebound in the third quarter,” said
Key Business Highlights
- Continued strong underlying market demand for Jeuveau® in the third quarter of 2020 driven by a 14% increase in purchasing accounts compared to the second quarter of 2020 to over 5,000 accounts2. Reorder rates increased to 68% in the third quarter.
- As of
September 30, 2020 , more than 2,200 purchasing accounts opted into the Evolus Rewards program and over 50,000 patients enrolled. Evolus Rewards is the Company’s consumer loyalty program providing patients with improved affordability and instant savings. - Continued to leverage proprietary digital platform with more than 80% of orders in the third quarter originating from the Evolus Practice App.
- On
September 21, 2020 , theUnited States International Trade Commission (USITC) confirmed their intent to review theJuly 6 non-binding initial determination of the Administrative Law Judge (ALJ). InJuly 2020 , the ALJ issued an initial determination and recommended an exclusion order that, if confirmed by the USITC, would prevent the importation of Jeuveau® intothe United States for a period of ten years and a cease and desist order that would prevent the Company from selling Jeuveau® inthe United States for the same period of time. OnOctober 22, 2020 , the USITC issued a notice updating the target date for their final determination fromNovember 6, 2020 toNovember 19, 2020 .
Given the proximity to the final determination by the USITC on
About
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.
Forward-Looking Statements
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 generate revenue if the USITC affirms, in whole or in part, the initial determination issued by the ALJ in a final determination and imposes an exclusion order preventing us from importing Jeuveau® into
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 and Evolux™ is a trademark of
Hi-Pure™ is a trademark of Daewoong Pharmaceutical Co, Ltd
1 Represents
2 Represents cumulative statistics from the launch of Jeuveau® in
Investor Contact:
Vice President, Finance, Investor Relations &
Tel: +1-949-284-4559
Email: IR@Evolus.com
Media Contact:
Vice President,
Tel: +1-949-284-4506
Email: media@evolus.com
Statements of Operations and Comprehensive Loss
(Unaudited, in thousands, except loss per share data)
Three Months Ended |
Nine Months Ended |
||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue: | |||||||||||||||
Product revenue, net | $ | 16,923 | $ | 13,167 | $ | 35,225 | $ | 15,478 | |||||||
Service revenue | 738 | — | 738 | — | |||||||||||
Total net revenues | 17,661 | 13,167 | 35,963 | 15,478 | |||||||||||
Cost of sales (excludes amortization of intangible assets) | 4,854 | 3,718 | 11,021 | 4,378 | |||||||||||
Gross profit | 12,807 | 9,449 | 24,942 | 11,100 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 21,944 | 30,897 | 70,796 | 83,308 | |||||||||||
Research and development | 350 | 693 | 1,003 | 3,555 | |||||||||||
Revaluation of contingent royalty obligation payable to Evolus Founders | (2,471 | ) | 1,795 | (9,922 | ) | 7,977 | |||||||||
Depreciation and amortization | 1,744 | 1,202 | 5,151 | 2,664 | |||||||||||
Restructuring costs | — | — | 2,956 | — | |||||||||||
Total operating expenses | 21,567 | 34,587 | 69,984 | 97,504 | |||||||||||
Loss from operations | (8,760 | ) | (25,138 | ) | (45,042 | ) | (86,404 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest income | 32 | 460 | 630 | 1,464 | |||||||||||
Interest expense | (2,758 | ) | (2,455 | ) | (7,680 | ) | (5,485 | ) | |||||||
Loss before income taxes: | (11,486 | ) | (27,133 | ) | (52,092 | ) | (90,425 | ) | |||||||
Income tax expense (benefit) | (27 | ) | (149 | ) | 227 | (14,899 | ) | ||||||||
Net loss | $ | (11,459 | ) | $ | (26,984 | ) | $ | (52,319 | ) | $ | (75,526 | ) | |||
Other comprehensive gain (loss): | |||||||||||||||
Unrealized gain (loss) on available-for-sale securities, net of tax | (16 | ) | (24 | ) | (3 | ) | 19 | ||||||||
Comprehensive loss | $ | (11,475 | ) | $ | (27,008 | ) | $ | (52,322 | ) | $ | (75,507 | ) | |||
Net loss per share, basic and diluted | $ | (0.34 | ) | $ | (0.98 | ) | $ | (1.55 | ) | $ | (2.76 | ) | |||
Weighted-average shares outstanding used to compute basic and diluted net loss per share | 33,749 | 27,471 | 33,734 | 27,404 | |||||||||||
Summary of Balance Sheet Data
(Unaudited, in thousands)
Balance Sheet Data: | |||||||
Cash and cash equivalents | $ | 85,127 | $ | 109,892 | |||
Short-term investments | 24,996 | 19,911 | |||||
Total cash, cash equivalents and short-term investments | $ | 110,123 | $ | 129,803 | |||
Contingent promissory note payable to Evolus Founders | $ | 18,779 | $ | 17,945 | |||
Term loan, net of discounts and issuance costs | 73,974 | 73,508 | |||||
Convertible note | 40,203 | — | |||||
Total long-term debt | $ | 132,956 | $ | 91,453 | |||
Working capital | $ | 119,691 | $ | 127,758 | |||
Total assets | $ | 215,779 | $ | 240,442 | |||
Total current liabilities | $ | 12,709 | $ | 24,439 | |||
Total liabilities | $ | 180,684 | $ | 160,985 | |||
Accumulated deficit | $ | (265,378 | ) | $ | (213,059 | ) | |
Total stockholders’ equity | $ | 35,095 | $ | 79,457 | |||
Reconciliation of GAAP Operating Expenses and GAAP Loss from Operations to
Non-GAAP Operating Expenses and Non-GAAP Loss from Operations
(in thousands)
Three Months Ended |
Nine Months Ended |
||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
GAAP operating expenses | $ | 21,567 | $ | 34,587 | $ | 69,984 | $ | 97,504 | |||||||
GAAP loss from operations | $ | 8,760 | $ | 25,138 | $ | 45,042 | $ | 86,404 | |||||||
Adjustments: | |||||||||||||||
Revaluation of contingent royalty obligation | (2,471 | ) | 1,795 | (9,922 | ) | 7,977 | |||||||||
Stock-based compensation: | |||||||||||||||
Included in selling, general and administrative | 2,924 | 2,417 | 7,802 | 6,443 | |||||||||||
Included in research and development | 28 | 109 | 152 | 538 | |||||||||||
Depreciation and amortization | 1,744 | 1,202 | 5,151 | 2,664 | |||||||||||
Non-GAAP operating expenses | $ | 19,342 | $ | 29,064 | $ | 66,801 | $ | 79,882 | |||||||
Non-GAAP loss from operations | $ | 6,535 | $ | 19,615 | $ | 41,859 | $ | 68,782 |
Source: Evolus