All right, we're going to get started. All right, thank you. Next up is Evolus, and we have David Moatazedi, who is the CEO. Thank you again for joining us. It's been a great ride. I see the picture up there from the launch, and it's just been great, right? What Jeuveau. So tell us, just give us a quick update on what's happening and just how Jeuveau has been doing. Talk a little bit about the fourth quarter and how you're thinking about this year, just to kick off things.
Sure. It is really the fourth quarter. I'll start there. It is a continuity of what has been, credit to the team, excellent execution, wrapped around a different business model. We have talked about that since we launched that Evolus is the first company that came into the space looking at the category differently. We are a performance beauty company, and that cash-pay strategy has enabled us to operate differently, to bring in this new generation of millennials into the market. We are being rewarded for that growth of building this beauty brand in a space where there are pharma companies and the way we support the practices. I am really excited this year. You see our guide reflects the launch of a new injectable hyaluronic acid filler, Evolysse. That product not only is a differentiator, we can talk about that, but the label has a mention of weight loss.
We often get asked, I was at a dinner last night, customers will say, "Look, this is a differentiated HA." That's great. This market has been relatively flat for the last year. This label of weight loss gets after the biggest potential catalyst for HAs or these patients that are losing weight that want to add volume back. Our ability to go out there and talk about weight loss and link it to a brand like Evolysse is analogous to when we launched Jeuveau and targeting millennials. I think we have just a number of growth catalysts that'll help drive this market going forward. We are really excited about it.
Yeah, that sounds good. Let's just kind of talk about market growth right now, which I think is probably the biggest concern, I would say. Obviously, macro concerns, just the economy slowing. Tell us what you're seeing and how did the fourth quarter go? How are you seeing the first quarter as far as just general trends?
Sure. Last year, now that everyone's reported, we think it came in, the market came in around 5% growth.
For the full year.
For the full year. I think the fair question is, well, how did that play out over the course of the year? Clearly, the market growth slowed a bit as we exited 2024. You do not see that reflected in our numbers because we grew over 30% in the fourth quarter. I think where we are positioned is a really good place in the sense that we bring more value back into the market. At a time when there is pressure on margins, there is pressure on procedural volume, we bring more value there. That reinvestment back in advertising helps. I think as we look at the market this year, we sort of conservatively guided in this mid-single digit range for market, but we see a number of ways to outperform.
We finished the year trading at roughly a 14% market share in the category, which is where we expect this year to be on the full year for the toxin. Assuming that we continue to gain share like we did last year, far offsets anything you might see in terms of market pressure. As we look at our year and our guide, I think we're well insulated. We get a lot of questions from investors around this consumer, consumer discretionary spend. I'll just remind you, and you know this, when you go back to 2008, the worst of the recession that we've had in our recent history, the toxin market actually grew a couple of points. These markets are very healthy. They're very resilient.
This consumer, when she looks in the mirror and it has worn off, you see all the wrinkles come back. She prioritizes this today more than she did even in 2008. It is a lot more affordable than it was then because the price points are the same, but their wages have gone up. We see a lot of reasons why this market will continue to be healthy and that the consumer will prioritize this over other areas of spend.
A lot of concerns were AbbVie talking about on their call, just slowing, but they also were losing share. I think they finally admitted that they were losing share a little bit, right? What did we learn from Galderma from their conference call?
Yeah, so Galderma also talked a little bit about the market. Look, I think the bigger players have a dated approach to the market. The pharma model isn't driving growth back for these practices. If you're our average clinician's a small business owner and they're running a small med spa or a small dermatology practice somewhere in the country, and they're now having to think about their cost of goods on the product, they're having to invest back in advertising. The average clinic spends 10%-15% of their gross revenue back in advertising. They think about these consumer loyalty programs because they help subsidize some of that cost. Our ability to go into these practices and talk about how we're a business partner with them as a small company ourselves, it's resonating with them.
I think that's playing a role in helping us establish more trust with these practices. That's why you continue to see in our fifth year, you've got the product continuing to gain share because of the way that we're supporting these small business owners. In all fairness, the pharma model, it doesn't allow you to support practices on those dimensions. I think that is ultimately the bigger differentiation point, high-quality products in a very different business model.
What would you say, how's the health right now of your customers, so to speak, these medi spas? Do they still feel like everything's kind of going strong? I mean, what are they saying?
Yeah, look, they are growing. Medical spas are growing. As you know, they offer a range of services too. Toxins continue to be incredibly healthy for the med spas. They are offering GLP-1s. That's a big part of a number of med spas and how they generate their revenue stream. HAs are still the second largest market that they operate in. It's a big part of it. Now, I will say the HA market, to some degree, as we've educated ourselves a little bit more, having been in the space for many years, but not for the last six or seven, I'd say it's a somewhat neglected market, meaning you've had a number of headwinds from the consumer standpoint that we believe we can play a role in helping reverse and accelerate the market growth there.
It really sits all in the back of this weight loss patient. They're in these clinics already, and there's an opportunity to bring them over and to convert them over into injectables. We think we could play a role in helping do that.
Good. I want to stick to Jeuveau for a minute. We can flip to the filler in a second. Talk about just 2025 and what's kind of the new, new thing for Evolysse for working on Jeuveau, because I know you've always got something up your sleeve and there's always new customer programs. Just give us a sense of what the focus will be this year from a marketing perspective.
Yeah. You know, from a clinical perspective, we focus on the precision of Jeuveau . As we continue to penetrate the market, we're only in 15,000 clinics now, half of the toxin market. The other half aren't aware of the clinical profile and the unique differences in what Jeuveau brings versus what they're currently using. We have an opportunity to continue to go into new accounts and tell that story. Within the existing accounts, we've continued to make the brand more relevant. It started with the millennial, but as the millennial's aging, the branding and the way we message around that consumer is evolving as well. That's why in the clinics that we're in, we trade at roughly a 30% market share in those 15,000 clinics we're in.
Part of it is this reinvestment back into the clinic and driving that new consumer in that's starting to get older. We announced Club Evolus . We introduced the first subscription program, and that's continuing to gain uptake in the market as well.
Just describe what that is for some people.
What we created through our digital platform is the ability for the consumer to get a year wrinkle-free for $49 a month. One of the challenges in this market is there's not price transparency. Consumers do not know what it would cost if they went in to get treated. We were able to overcome that with a subscription model. It is $49 a month, patients wrinkle-free for a year. We did a pilot with about 500 patients. They were coming back in every 90 days versus on average patients come in every four to five months. We are accelerating the timeframe they come in. It is really a, we call it a win-win for all sides, right? The consumer is getting treated on the cycle they want to get treated in, and they get savings for signing up in a subscription.
The practice benefits, because instead of that consumer coming into their office a couple of times a year, they're coming up to four times a year, and they're buying more each time they come back. Of course, we benefit because every patient that moves in our subscription, that consumer lifetime value doubles versus somebody who's in our traditional loyalty program. It really is a win-win. It hasn't been done in our space by a manufacturer, and our digital platform enabled us to do it. This is a long game for us. I mean, subscription is brand new to this category. You're starting to see GLP-1 manufacturers introduce subscription. We didn't anticipate that. I think that's a really nice thing to see in the market because these consumers see this as part of their everyday beauty regimen.
Having programs like subscription models enables this to become more realistic for them.
Yeah, yeah. This was rolled out recently in a broad way.
This was rolled out in the fourth quarter of 2020.
Fourth quarter in a broad way.
We limited it actually to a certain number, just under 100 accounts. We're now expanding beyond that.
Yeah, yeah. Cool. Interesting. Okay. Have we seen another toxin player join yet? Hugel? Did they ever launch?
Yeah. Hugel, we do see them in the market now.
In the US.
They're a partner. They are in some clinics where they're, as you can imagine, given the most recent toxin that came before them, I think there were promises made and then the clinician saw a different outcome. Practices are going to scrutinize a new toxin, as they should. It's their number one procedure they do. That interest in making a switch to a new product will be based on how it performs. I think right now it's in that stage of assessment. As you know, we compete with Hugel in Europe. We're aware of that product and the profiles that it has, and we feel really good about our prospects. You see that reflected in our guide.
Yeah. Really, maybe you can talk about the Hugel product versus your product and why we shouldn't be concerned about it, I guess.
Actually, I think David answered it in the best way. One thing that we've seen with our product is a lot of precision and predictability. When we look at the Hugel product, at least from what we saw, we see a lot of variability even in their phase III studies, up to 40% difference in just primary endpoint. That's kind of the feedback we're getting. I think David summed it up best. We compete against them right now. We seem to do fairly well against it.
Does it diffuse more from the site or just the duration's not there?
Yeah, all we can talk about is the feedback or sorry, if you look at it, what we're just looking at is the efficacy metrics. There's a lot of variability, at least in their phase threes.
Yeah. Interesting.
Which is unusual.
Right, right, right. Obviously, everybody's excited about the Evolysse filler launch. Maybe you can describe a little bit of the technology that makes this so interesting and differentiated.
The technology is really simple, which is kind of why David and I liked it so much. If I were to try and sum it up, hyaluronic acid injectables are based on hyaluronic acid. Mother Nature invented hyaluronic acid. The reason these gels work so well is because of the complexity and the length of these hyaluronic acid strands. The technology is really based on a manufacturing step that we think does a better job in preserving that HA structure. When we looked at the data that we had on the benchtop, it seems to stand up very well to testing and stress testing. In the clinical, we saw that borne out also. We see a very efficient gel where you get a disproportionate amount of correction and very good results in long duration within.
What will the salespeople, everybody be able to talk about as far as comparison versus Restylane?
We had two products. They went head- to- head against Restylane. In the label, we have that it met non-inferiority. We also have the stats in there where you could see the confidence intervals and the p-value showing statistical superiority in the primary endpoint, p-value of 0.001. We have all the efficacy in that label that goes up to a year. There we could see even at one year, we still have a very high responder rate. On the sales force, the other thing that we got that we think was very helpful, in particular for the patient labeling, is we talk about wrinkles being caused not just by aging, but by weight loss. To our knowledge, we're the first to ever have that and the only ones to have that. That is something that we believe we can take advantage of.
Interesting.
In particular with the backdrop of GLP-1.
Yeah. Help us with the launch strategy and then help us with how to think about the ramp of the product and the numbers. I guess it's kind of a one-two question.
Sure. I'll take the first part. We did spend quite a bit of time over the last 18 months doing research in the market to understand what products were successful historically in their launch strategy and where products were challenged. We did bring on a few individuals to the organization that have deep expertise in hyaluronic acid fillers. We built a new medical education platform that we've now launched called Evolus Academy, which will enable us to expand our training efforts around the injectable HA. We are now in that stage where we're rolling it out. We've identified sort of our core faculty and we're training them on Evolysse . We're going to be rolling out the product in the coming weeks. What's really important is that they have really good results initially in the training to support that.
That'll all be wrapped around a unique way of going to market with Evolysse . That's something that we'll roll out after our national meeting, which we have planned at the end of the year.
What do you mean by a unique way of going to market?
Every product has a unique way of launching. With Jeuveau, we did the JET program to give a number of accounts early access to the product. You can imagine we'll do something unique with Evolysse as well, but we'll roll that out after we come out of our national meeting so you get a better sense for that in the first quarter. We see in our research, 15,000 clinics that currently work with us, 99% of them expressed interest in bringing on Evolysse and trialing it. We know there's a large base of practices that are excited to use the product. We see another 15,000 clinics in research, half of them told us with Evolysse , they'd be interested in revisiting, potentially partnering with us.
We have a unique opportunity to go deeper within our existing customer set, which could enable Jeuveau to be more successful and also to start partnering with more clinics. I think that'll be our strategy this year, going deeper and wider at the same time.
Yeah. We've guided $345 million-$355 million of revenue for 2025, of which we expect 8%-10% to come from the filler. Call it this $30 million-$35 million number. As David alluded, we are going to do a lot of training. Like any one of these products, there's quite an adoption curve as people get accustomed to the performance of the product. In that will be sampling of the product as well as training events. You're going to see investment concentrated in the second quarter as we're embarking on the launch here now. That will mean a relatively modest revenue actually in Q2. That will back-end weight the majority of the revenue, particularly in Q4, just because it's seasonally the highest performance quarter, highest procedure volume quarter of the year for Evolysse itself.
Yeah. How should we be thinking about the pricing strategy, whatever you're willing to share, because the Jeuveau pricing strategy was unique and seems to have worked pretty well?
Yeah. Yeah. And Jeuveau , as you know, when we first entered the US, it was at a different price point than where we are today. As we've taken the investment we made at launch and continued to build on it with co-branded media , we've used that as an opportunity to close the gap relative to the market leader. We continue to remain at a savings of roughly 20%, but in line more with Galderma and other companies, more in that next value segment tier. This product is the first new technology to enter this market in a decade. As Rui pointed out, it really is interesting and different science to preserve more of this natural HA. We see it as very competitive against that premium line of the market leaders.
I think we see the pricing being sort of in line and competitive against those brands. We do believe that with the launch of Evolysse , it elevates not just our partnership with them, but just the overall portfolio. We tested that in research and it tested very well. I think the clinics want to see us help grow this market, and that's where you'll see us making the biggest impact.
Glad you brought up the market because while we've been so focused on toxins with your company over the past couple of years, it seems like the filler market has not been as strong as the toxin market. I think there's a lot of concerns that it's slowing even more. What's your sense of just the broader filler market and talk about the growth dynamics relative to the toxin to help us?
Sure. Yeah. The toxin market has just been incredible. It's always been consistent. If you go back 20 years, you could say, okay, it grew mid-single digits, it grew low double digits. It sort of plays in that range, and it plays in that range consistently. If you did the same on the HA market, what you'd find is the highs are higher than the toxin market and the lows tend to be lower. On a five-year period, interestingly, they tend to grow closer together.
Still 5%-7%.
Still mid to high single digits. I would just say that I don't think any one moment in time is reflective of what you'll see over a longer period in the HA market.
Why do we see that kind of more volatility?
I think more recent, part of the volatility is when consumers are making pocketbook trade-offs, they always stick with the toxin first. It's $300- $500, it's more affordable. As I mentioned earlier, when you look in the mirror four months after you've used a toxin and it's worn off, you see it because it's 100% worn off. Whereas when you go to a filler, it's a gradual tapering of the outcome. A consumer doesn't wake up four months or six months later and they absolutely need the filler. When you go out a little further and you say a year, year and a half, they absolutely see the difference. That's why you tend to see a little bit more of that, the spikes and the lows driven by that.
Now, I do think the GLPs have changed the dynamic just a bit in the sense that now they're prioritizing their pocketbook to weight loss before they're going to add on the injectable HAs. I think that is a significant tailwind we see for the category. When I think about the growth potential in HAs, we could easily be sitting here over the next five years saying, this market's growing so much faster than toxins. What's happening with the toxin world? Toxins will continue to be healthy growth, but the tailwind of GLPs, the research supports it, the number one procedure they want to add on when they lose weight is injectable fillers. The reason is because they lose that volume and that is the first sign of aging and they want to re-inject back.
I think we believe that we can play a significant role in doing that. We're the only manufacturer that can make claims around that. That claim alone gives us the ability to do things in the office to target the patient that's already in there. It gives us the ability to put that in our co-brand and media messaging out to the consumer and enables us to target those GLP patients very differently than those that do not have it in their label because they cannot speak to it proactively. I can tell you when we've done small focus groups since we got this in our label, that is the biggest difference that clinicians see, this opportunity to go after that segment. They're looking for growth and they're looking for a company that can come in and play a role in doing that.
Is there a potential partnership with some of these weight loss clinics and stuff? How are we thinking about that?
Yeah. I like the way we're plugged in today, right? If you think about it, we have a consumer loyalty program today that has over a million consumers in it, and the majority of our clinics use it. We have the ability with Evolysse to target consumers and give them those benefits. You can imagine that and how we can target within the clinic if they do have GLP patients, it opens up a lot of opportunity. These clinics today that the majority of our revenue touches in some way are co-branded media . Adding on Evolysse means these practices purchase more from us, which means they earn more co-branded media from us. We'll build co-branded media that targets that weight loss patient because we can actively talk about that. That helps drive some of that growth.
We see a number of pathways to be a contributor to that catalyst of growth. That is not an overnight idea. I think that is something that we will continue to build over time. I do believe this market has incredible potential in HAs. There just has not been the investment in the space because I think the bigger players have seen a market that has slowed and they have pulled back the investment behind it, which makes us a unique player in the space coming in to be able to do that.
Interesting. We spent so much time talking about the U.S. Let's talk about OUS and maybe start with the toxin OUS, what happened in the fourth quarter, how we expect in this year to play out, and then we can flip to the other.
Yeah, our OUS markets have been a really exciting growth story for us. We've been launching markets for the last three years in a row. We launched the U.K. in 2022. We launched Italy and Germany in 2023, and just this year, Spain and Australia. With all of those launches, we continue to lap around sort of the launch dates and see accelerating growth. We're gaining share in the U.K. well above our own expectations and right where we hope to be for the longer-term guide. We have guided to at least $100 million of revenue from OUS by 2028. We're well on our way to achieving that goal. About 5% of our revenue in 2024 came from OUS markets, and we expect that percentage to clip up over the coming years.
The toxin is gaining a lot of traction outside of the U.S., and we're really excited about what that opportunity has been.
Is that $100 million you refer to, that's toxin only?
It's toxin and filler.
Toxin and filler.
Correct. Yeah.
Right, right. Okay.
Correct. We will launch the filler in the back half of this year. We did get that approval late last year.
Yeah. What are the plans for the rollout there? What markets first for filler?
Yeah, we haven't disclosed the plans. We said we will introduce the, it's called the Estyme line of fillers in the back half of the year. In the front half, Rui's team is leading sort of an experience-based program with some thought leaders around Europe to gain experience because the full line is approved there. In the U.S., we got approval for the first two products, but the lip product and the cheek product, which we call Sculpt, are also approved in Europe. We are putting these products in the hands of the thought leaders so we can start building up that experience and advocacy as we continue to build our footprint with Nuceiva, our toxin, in the back half. We will look to introduce it.
Obviously, in key markets like the U.K., where we now have a sizable infrastructure that can absorb it, that's an obvious market we'll want to enter. We will assess some of the other markets that are, let's call it, newer to launch Nuceiva and determine whether we launch them in the back half or look to move them to 2024.
Talk about the health of some of these markets relative to the U.S. growth numbers that you were talking about earlier. Does the U.K. market grow like the U.S. market does for toxins and fillers? Just give us a sense.
Yeah, the markets are healthy. Frankly, they're healthy all around the globe. All these markets are growing. We don't go into clinics typically and find that their toxin business is down year over year. These toxin businesses across the board are all growing. It doesn't matter what market you're in. Sure, markets like Spain are booming right now a little bit more than maybe the U.K., but they're all still high-growth markets. When you talk to med spa groups, they're still adding injectors. They're still hiring. Their growth plans of adding additional facilities are still playing out. The same applies within the dermatology and plastic surgery community. We were at AAD this past weekend, and dermatologists are still looking for more injectors. The hardest part is finding a great injector or training new ones to get to a place where they're confident enough to start treating patients.
I do believe the market, despite the headlines you read, the backdrop is there's a lot of growth potential still here, and these practices are still investing.
Are there medi spas? Is it the same business model of customers overseas as it is in the U.S.?
It varies a bit because some of the regulations vary. In some countries, it's MD only. Like if you go to Germany, you won't find the nurses and PAs injecting. In other markets like the U.K., it's more similar to the U.S. It does vary a bit, but in the end, the consumer demographic that's driving it is still the millennial on a global basis. The psychology of them looking at it as a beauty treatment is the same. The way that they're servicing these consumers, the way they inject these products is more similar than different. I think there's just the regulations that vary.
Because I've always found you over-index with the younger crowd. You over-index with the medi spas, right, relative to your competitors, which is why you're growing faster probably. Is that the same kind of thought process that goes overseas as well? It's the same dynamic?
The positioning is the same, but it does vary a little bit by market in terms of who's using it.
Yeah. Sandra, talk about the longer-term guidance. Just remind us of those numbers again. If we're still completely comfortable with those numbers, just given the macro concerns, I guess, of yourself.
Macro is definitely an interesting environment these days, but we've got a very thoughtful way that we build our guidance, and it's very much a bottoms-up view. We take a very responsible approach to how we think about it. As we think about 2028, which is where our long-term guide is, we've consistently said at least $700 million of revenue and at least 20% non-GAAP operating margin. The reason we feel really confident in the at least is that we're assuming very modest share in each of our products in each of our geographies to support that guide. It assumes that we don't gain any more share on the toxin compared to where we are today. It assumes we achieve 7% market share on the filler, which is a meaningful discount to the performance we achieved on the toxin.
For example, for the last three years, we've gained two percentage points of share each year on the toxin. If we continue that performance on the toxin and we match the toxin performance on the filler, that $700 million is a billion. There is a lot of opportunity for us to beat. We continue to outperform our own expectations each year when it comes to share gain. We have a much more favorable launch environment for this filler than we did for the toxin, right? We did not have any customers when we launched the toxin. We are in half of the customers in the U.S. market today. We have an incredibly competitive and exciting product that we're putting out there. We certainly tried to build our guide in a way that was thoughtful about confident execution.
That leaves us a little bit of room if the market's a little bit softer than we expect, that we'll still be really confident in that at least $700 million.
How do you think about the market growth over the next couple of years? Has that changed at all?
Yeah, we've pegged it in this sort of 10% range, right? If you look historically, the market's grown at about 13% on average over the last five years. That high single, low double digit, as David mentioned, over a long term tends to play out. You can see a little bit of movement in any one given year, but we continue to see the younger generations opting into these procedures at an incredibly high rate. There remains very, very low penetration on those populations with these procedures. We have aligned the market to about a 10% growth rate into the future. Having said that, we've been a little bit more modest in our 2025 expectations as we built our 2025 guide. We expect a flat filler market, knowing that there's a little bit more pressure, as David mentioned, on that share of wallet.
We do believe that GLP tailwind will come, but I don't think we know exactly when it will come. We have thought about 2025 in a more prudent way and kept that flat on filler. We are in the high single digits on the toxin, right? That is what we have seen over the last couple of years was these mid to high single digits in 2024, very high single digits in 2023. We are expecting kind of a high single digit on the toxin.
High single digit toxin, flattish on the filler for this year.
Flattish, correct.
Over the course of a three, four-year period, it's closer to 10% of the combination of it all.
Correct.
You're saying. We do expect the filler to rebound.
We do expect the filler to rebound before 2028. If we're a little wrong about that, we have lots of opportunity to outperform on the share side.
Right. Right. Are there any other new competitors? Anything else? Who else is coming in on a filler or a toxin? I mean, we talked about Hugel. We'll see how that goes. Anybody else on the horizon that you're focused on?
I think you're seeing a number of, you'll see a few more products enter, more kind of single product companies, assets that are less differentiated coming into the category. We don't see a company that's coming in with a portfolio that'll be able to be differentiated over time. I think what's playing out right now is the market starting to segment. You've got a group of price player companies with a portfolio, and then you have the premium segment. We've continued to inch our way up towards the value space. I think that puts us in a unique spot where, relative to the premium brands, we offer a unique value proposition with high-quality products. We also don't compete on price relative to the price players because we've focused on that value.
A few years ago, I think our question was, well, will you ever have a second product line? Are you going to be one product story? Now that you've had two products, I guess the question is, is there going to be a third product or a fourth? Like how do you think about business development just for the last 20 seconds or whatever?
Rui and I haven't slowed on the business development side.
Is there a lot going on out there?
Yeah, we see the biostimulatory space as a fast-growing space for the foreseeable future. Skin quality is another area that we think is a fast-growing space. We have a pipeline that continues to feed the company for the next several years with new Evolysse products next year and the following year. As we get out 2028 and beyond, I think we see an opportunity to innovate further. We will be very active on that side while we continue to execute.
Just to understand, what does skin quality mean? Is that like a cream or an ointment? Is it an injection? Is it a what?
As David qualifies us as a performance beauty company, and the topical stuff will have a certain degree of efficacy. We're always looking for something that is as good, if not better, than what's currently there. The other implication, it usually has a high hurdle of entry. We're looking at skin quality, for instance, hyaluronic acid injectables to actually improve the quality of the skin. You kind of intuitively can see a youthful skin has properties of hydration, elasticity. Like you can tell old skin from new skin. With injectable HAs, we believe you can actually take skin and make it look more youthful.
Oh, interesting. A lot of interesting. Thanks. Thanks for joining us. Appreciate it. Good luck. Hope you have another great year.
Thank you.
Yeah, thanks for joining us. Yeah, appreciate it.