All right. Thank you for your patience. It is our pleasure to be in the Evolus session, and our pleasure to have David Moatazedi, CEO, the new CFO, Tatjana Mitchell, as well as CMO Rui Avelar. Evolus is an exciting time right now because you have the second product in the bag. I think this is the first time that we are going to be able to watch the leverage come out of your model. Why do I not just let you give the quick overview, and then we can just launch into Q&A?
Sure. Thanks for having us. It's great to have Tatjana on board. Rui and I have sort of been building up to this moment. As you know, Evolus has been an incredible journey. Over the first six years of the company's life cycle, we were a drug development company. We got Jeuveau approved in the U.S. and the same drug approved in Europe under the name Nuceiva. Over the subsequent six years, we established Jeuveau as the fastest growing brand in the U.S. and captured mid-teens market share. We're the first company to break through that double-digit market share since the first two players entered the space. I think our unique beauty-first platform is really taking hold in the space. The way we partner with these clinics is very different.
When you bring that together with the quality of our products, it's enabled us to build a meaningful base of 17,000 customers around the U.S. That becomes a significant point of opportunity for us as we've now entered the second phase of commercialization of the company, which is beyond Jeuveau with Evolus. What you saw over the last six months is our second product, Evolysse. We needed it to be a differentiated product. We did not want to bring another filler to this market. I think we've established it as that, as a new technology with the Cold-X from scientists that have a lot of experience developing HAs. They developed one of the market leaders today that's sold by Galderma. This is a new way of making hyaluronic acid. We've only introduced the first two products in the line of four.
Next year, we'll introduce the flagship, which is a sculpt product for the mid-face, a less crowded market, higher dollar value associated with it. It really does help to round out our portfolio. We're really pleased with the fact that Evolus is off to a stronger start than any other HA in the past decade. We have a business that's growing double digits in a market that's been challenged this year. Jeuveau continues to grow in the U.S. while our international business is very robust. Its growth as we enter new markets and some of the more established markets like the U.K., which is approaching three years, is continuing to grow at a very high clip. Despite the challenging macro- backdrop, we continue to outperform within the respective markets that we're in. We think that this is transient.
The market will come back around. When it does, a company that can perform in a challenging market will have an outsized performance once again in a market that's favorable. Happy to get into it from here.
Yeah. Why don't we just start with the macro- picture? I guess historically, neuromodulators have done very well through these difficult, even market disruptions, economic times. And Jeuveau, just until last quarter, was outperforming that. It has since recovered for anyone who's curious. It's still interesting that historically, neuromodulators have been pretty resilient. This time, it seems to be taking a step back. Maybe you can talk about the macro picture, how it's different this time, and whether there's other forces that are causing any kind of dislocation. Like AbbVie claims it's a macro, but they're losing market share and they won't admit it. Galderma is having a greater presence. Maybe we can talk about the competitive landscape within this macro- picture a little bit.
Sure. For those of you that follow the aesthetic market, toxins have been in the market in the U.S. for about 25 years. In those 25 years, there are really three years where I called we've had speed bumps. This is the third one. When you step back, this category is a high single, low double-digit growth category. It benefits from the fact that these products and procedures are becoming generally more and more accepted. Consumers view this category, especially toxins, as preventive. They are starting at a younger age. That trend is not going to slow. Now, in the near term, when you hit these speed bumps, 2008, 2009, it was a macro-driven speed bump because of the recessionary environment. There was a COVID period, which practices had a forced shutdown. That impacted the market.
Then subsequently, in both of those cases, you saw an outsized rebound because you benefit from those consumers that want to be in that have had to sort of stretch their intervals. You also benefit from the pent-up demand, which is continuing to build. Even today, as we think about a challenged environment, you still have consumers that are thinking, "Man, my wrinkles are setting in. I really want to go in and get treated." Maybe because of the macro- environment, they're delaying that. That doesn't change the fact that when things come back around, you see this outsized rebound as a result of those dynamics. I think we're in the middle of one now, but a little different from the prior two. They're always a little different. In this case, it is. I agree with AbbVie's comments.
We were making the same comments a quarter prior that this middle-class consumer, which is the lion's share of usage in this market as a consumer making under $200,000 a year, they're under some pressure in terms of spend. They're having to prioritize their spend. What we see, which is positive, is that those consumers that are in the category are still coming back. They're just stretching that interval between treatment. We see that through our loyalty program. It's about a 10%-15% increase in terms of the time intervals between treatments today versus where it was 18 months ago. Of course, that new patient demand is slowing as well. That, I think, is a transient piece. In this category, we have never seen the category go four consecutive quarters of negative growth.
We're entering the fourth quarter where we wrap around on a depressed base. Now, assuming there are no significant market forces that are incremental to what we've seen in the past, you'd expect the fourth quarter to represent another sequential improvement that we did see from Q2- Q3, that we'll see that again in the fourth.
That wrap-around starts in 4Q, or it was started this past 3Q?
The wrap-around really starts in Q4 on a negative base. We think Q3 last year was a flat market. It wasn't quite negative growth yet.
Yeah. OK. And just as a point of differentiation for anyone who's new to the story, can you just talk about Jeuveau's profile? It was launched as a drop-in product that was very similar, but it seems to have developed some of its own characteristics. Maybe you can just review that and talk about how you're marketing that now.
Sure. Yeah.
That would be helpful.
The quality of the product is paramount here in terms of any clinician choosing to make that move. I'll maybe ask Rui to comment because he's led all the clinical development. There's been more data that's been generated since. You talk about the product, and I can come back to the market.
Yeah. Just to be clear, this is a product that's six years into launch and still growing. What is it? What quality is that, right?
There is a cadence of introduction. I think right at the start, we came in, we realized we were going to be the fourth entrant. I'll be complimentary of the toxins that are approved. If you looked at toxins as a class of drug, I can't think of a drug that has a more profound effect. They all work really well. Having said that, if we look at the greater broader literature, the toxin that seems to have done the best was Botox. When we came in, we recognized that. We realized that people were inevitably asked, "How do you compare to the standard?" We actually did something that no one else had ever done. We ran a head-to-head phase three, large, over 500 patients, to have that answer. What we showed is we did really well.
In fact, there are 30 endpoints there. We numerically at least beat Botox 26 out of 30 x. That opened the door. When we start the product introduction, that allowed people to come in, start using, dabbling with it, and then see for themselves how they performed. That has been increasingly going up. This year, we actually had another very interesting development. That is a doctor, Ivona Percec , out of the Philly U Penn. She basically decided, "I'm going to do my own test independently as opposed to having something that's sponsored by a company." She looked at, at that time, the four toxins that were approved, which included ours. She independently looked at it. The first thing she looked at was onset. Dysport has a reputation of having a fast onset. We have a reputation of having a fast onset.
At day three, sure enough, the two of us have the fastest onset. The next thing she looked at was highest peak effect, which is at 30 days. Jeuveau had the highest peak of effect. The next thing she did was she recognized that no one has a six-month duration claim. She looked at how these toxins all compared to six months. We actually still showed a statistical difference from placebo. Botox did not. Dysport did not. I think the other thing that was interesting in that finding was typically when you use a toxin, it takes a couple of weeks before it starts hitting that peak at 30 days. What she showed was validation that we actually have a very fast onset. Actually, by day three, you are almost at the peak efficacy that you would have at day 30.
It was a complete independent validation that this drug seems to work pretty well. That has certainly been helpful. That was in Germany.
Where's the market moving as far as long duration? I know that it was obviously the buzz when Revance was developing long duration. Have you been seeing more utilization of Jeuveau at higher doses for longer duration? Higher concentrations, rather.
When Revance did a really clever thing, they doubled the dose. And they were able to show that they could get 24 weeks duration. I think we need to give credit to Allergan and AbbVie. They did not get much credit for this. But they also showed that when they doubled the dose, they also got 24 weeks duration. So we wanted to be positioned to if this was going to take on anything that we had data there too. We published that data where we doubled the dose. And we actually got 26 weeks duration. So in the ballpark. But I am glad numerically it was a little higher. But if you take a step back, we thought that there would be a limitation to this.
Because if you do the math, like any drug, you get to a plateau where you use a certain amount of drug, and then you do not get any more effect. If you look at what a 20-unit dose gives you, and then you double the dose, for 100% more drug, you only get about 15%-20% more efficacy. It does not make any sense. What we have seen is we just have not seen that adoption in a meaningful way. There are some clinics who like to play with dosing and do that. Obviously, with that phase two data that we have, some people have gone there.
Got it. I want to transition to Evolus. Before we fully do that, launching Evolysse, what kind of impact did that have on Jeuveau last quarter? How much of it was macro? How much was it just dislocation because of the launch of Evolysse and having to focus on that in terms of sales? How have you balanced that going forward?
Sure. Look, launching a product is not an insignificant lift. As I think about each quarter, it sort of tells its own story. In the bigger picture, we're learning our way through selling a portfolio. We're introducing new elements each quarter. As I think about the second quarter, the launch of Evolysse consumed a significant amount of field force effort because we had a protocol for how we wanted the product rolled out in every clinic. The reps were challenged with doing that. That came at a significant cost to their effort on Jeuveau. Some of that explains a little bit of the challenges of Q2. The other part of it is, of course, macro-related also. In the third quarter, we found a better balance of the two products.
Keep in mind that up until now, you're not getting the, call it the synergy in front of the customer of having Jeuveau and Evolysse leading to more purchasing of both. Where you're getting the synergy is, of course, in the infrastructure. At launch, we created the loyalty program. Then in July, Evolus was incorporated into it. You get the synergy in the sales force, introducing it to the same customer base. We knew going into the launch that 98% of our customers said if we brought in this new product, they would be very interested in trialing it. You look at through the first six months, half of our Jeuveau revenue has placed an order for Evolysse. Clearly, there has been that pull-through of the interest is resulting in utilization. At the same time, we're also learning our way through this product.
Unlike other HAs that have entered the U.S., in the case of Evolysse, we're the first market to launch this product. We have launched it, but we're learning through it. What we're realizing is that that first training is very critical to getting accounts to start to really play with the product in a meaningful way. It is a second training that helps them get more confidence to really adopt the product in a more meaningful way. We see that directly in the revenue, that the second training drives that. That is a bigger focus for us in the fourth quarter. Lastly, when I look at our base of business going into the fourth quarter, there are a few things I see. One is we are definitely on the right track. This is the fastest launch in the HA market in over a decade.
When you compare a more successful recent launch of the RHA product, this is exceeding that trajectory, which tells us we're on the right track, number one. Number two, of the roughly 16 million or so that we've sold in Evolysse, 10 million of that is coming from recurring revenue, meaning accounts that have ordered more than one time. So we know that if we can get in there, get them confident with the product, get them trained a second time, it's a differentiated asset. And that is where the fourth quarter is really focused. It's going to be the peak season, of course. For HA fillers, it will be the fourth quarter, in addition to some of those key learnings being applied with a better balance on selling.
This is where the 1 +1 starts to inch towards greater than 2 and hopefully over time becomes 3, is that we've introduced a portfolio bundle. That's a growth benefit for clinics because we have 2,500 customers now that have purchased Evolysse that are interested in doing more business with us. We haven't had that carrot there, unlike our peer set, which does. That was purposeful because we wanted Evolysse to stand on its own. Now we feel it's the right time to introduce that. We'll see how the combination of all those evolves into getting us there.
Yeah. I would say the introduction of Evolysse would be important to unlock new accounts that maybe stayed on the sidelines because they did not want to break up the loyalty programs that they were in or did not want to buy only one product from a single source. How important has that been? Have you observed unlocking of new accounts because ofy Esevolus? I guess on the flip side of that, and I guess fourth quarter will be the evidence of it, have you been able to go deeper with Jeuveau because you have Evolysse in the bag, because you are now going to have this opportunity to have your own bundle for these customers?
The introduction of Evolysse has done exactly what you said. It's getting us in the door in clinics that were less interested in thinking about us as a single product company. There's a couple very sizable groups or chains in aesthetics that are in some stage of assessing us to bring us in. Evolysse is what opened the door. I'm thinking about a couple right now that said, "We'll try Evolysse because we've heard great things. We want to try that first. Then we can talk about Jeuveau later." In both cases, Jeuveau is also now part of the trial. I see a lot of momentum as we go into 2026 of us getting into sizable clinics that are just selective about their partners because they want fewer partners.
They would rather do more business with fewer than to try to pick and choose. It has opened up doors that we did not have. The benefit of then Jeuveau following through in those accounts is meaningful. That is not insignificant. As it relates to the benefit of the portfolio in the fourth quarter, I would just say the fourth quarter portfolio bundle that we put in is for one quarter to begin to start the momentum of thinking of us as a portfolio company. I would not think of it as an inflection point idea. Just like anything else, you have established players that have been in the space for 20 years. We have to be thoughtful about how we build a partnership with them. This is the first step of introducing how we can become a bigger partner with their clinics.
It is the first of steps that will come over the course of 2026 and beyond. Part of those steps is also bringing Sculpt and having a more rounded-out portfolio in the HA space. All of these are building blocks to us becoming a more significant player. I will say if you step back, because we always talk about quarters, just step back. In 2021, this was a $100 million business. We have tripled that business from 2021 through 2025 in a market that has not close to doubled. We continue to outpace the market in terms of our growth. It is through quality products, strong execution, and building partnerships. We see a continued opportunity to outperform the markets that we operate in, notwithstanding the international opportunity, which is in its very early days.
OK, great. Before I get away from all the big picture macro- trends that we're seeing, I mean, obviously, we know that fillers are more impacted by macro-economic trends than the toxins. What is going on in the filler market? Is it only the macroeconomic trend or macro-economics? Or is there a different trend in fillers and the desire to use fillers that is impacting the market more? From that perspective, how have you tried to address that? Is it resonating with physicians?
Yeah. You're right. Putting aside the macro piece for a moment, the market has been impacted by this perception that using hyaluronic acid fillers creates an unnatural look. Part of it was fueled by this post-COVID boom, where rather than the average consumer coming in and getting one or two syringes, because they had the additional excess discretionary spend, they were purchasing more syringes. Practices were giving them more. They were probably injecting a little bit more than they would have in a normal environment. In many cases, that resulted in consumers coming back and saying, "This doesn't look natural. This looks overdone." That played itself out into the media. You started to have this negative sentiment around equating the word filler with an unnatural effect. That's where we saw a big opportunity for Evolus.
I will say from a consumer standpoint, we see two significant ones. One is to move away from the word filler. We launched with this campaign, Drop the F word, which was a provocative way to get practices to stop using the word filler. They're so used to doing things a certain way that we wanted something that really made them rethink their vernacular. You see that all of our advertising, all of our branding around the product is around hyaluronic acid. The reason is because consumers view hyaluronic acid very favorably. When we went into research with Evolus, we introduced it as a filler. Then separately, we went to a different cohort and introduced it as an injectable HA. The interest level in an injectable HA is magnitudes greater than a filler.
You're starting to see now some of the other companies dropping the F word too in their advertising and doing unbranded campaigns. I think that's excellent for the whole space. Toxins went through a repositioning too. Many years ago, there was a view that toxins created a frozen face. Even injectors would tell their patients, "I'm going to freeze your lines." The media came out and celebrities came out and said, "I don't want a frozen face. I'm an actor. I want to look natural." The category evolved from frozen to relaxing the lines. I view the same thing happening in this world. Moving from the word filler to injectable HA is analogous to what happened in the toxin world. I do believe this market will absolutely rebound. This category is here to stay.
Hyaluronic acids are naturally occurring ingredients. They are reversible with hyaluronidase. They give you an immediate effect, which cannot be achieved with other modalities. I do believe we will come around on this. Credit to Rui and his R&D team. We also were able to get the mention of weight loss into the label for Evolus. That is important because the biggest tailwind for this category is that consumer that is on GLPs that is doing it to look and feel better, that wellness category. Once they get to their desired weight, there is a higher interest in adding on aesthetic products. It is usually the volume loss in the face and the skin laxity that they are trying to address first. We think that positions the HA category very well to benefit from that.
We also need that pocketbook challenge of the macro environment to also come around to help support it.
Right. Rui, maybe you can talk a little bit about how, I guess, the cold manufacturing of Evolus is resonating with physicians and in practice how they're seeing the product differentiate from others that they're used to using.
One thing that you just heard is we're really trying to anchor back into kind of a natural look and a natural outcome. If we carry on that theme, we know that hyaluronic acid is a natural molecule. Mother Nature invented this. It's in your skin. It's in your joints. I basically try to explain, look, the reason these HA gels work so amazingly well is because of the long, complex structure of HA. That's where I start. I explain during the manufacturing process, when you take that thermal energy out, you just do a better job of preserving that natural HA structure. That's it. The short version of this is we believe that our manufacturing process just is a little gentler, and you just preserve that HA structure better.
The outcomes that we've seen is when you have this long, complex chain, we seem to see a more efficient gel. What I mean by that is a little bit of product seems to go a lot further. The data certainly bore that out. We've done three pivotal trials right now that are in the public domain. Every time you look at the data set, it's exactly what we saw. You need less product to get as good results or more. The next reason why that becomes really important is it's more natural in that it looks more like your natural HA. It seems to have those benefits also, even from right or wrong, from an adversement perspective. It's closer to your natural structure. There's performance. It's more efficient. Because it's more natural, we talk about its versatility.
You may ask, how does that compute? Here's another important thing. When you take an HA and they're cross-linked so that they do their thing, the more cross-linking or the higher the G prime, the harder it is. As you go more superficial in the skin, you have a higher probability that you're going to have inflammation. When you look at these HAs, they tell you you have to use it in the deep dermis, the mid dermis. This one, you can go superficial dermis. They give you those directions. If you look at our prescribing information, you can use it anywhere in the dermis. In other words, because of this natural structure, it seems to be very low in the inflammatory index. You could really flex it up or flex it down.
The benefit to the clinician, the benefit to the patient is you may pop open a syringe. You may be going in because you want to correct something deep. You have high efficiency. You find you've got this extra material. Because of that flexibility, you can go treat other places of the face, go more superficial. It just gives you a tremendous amount of versatility. A natural structure, very efficient, highly versatile in terms of where you can use it. It allows you to go superficial or deep.
Great. Do you need Sculpt to actually capitalize on the weight loss component, the trend that's going to happen, I would say, probably within six months to a year? It's really going to start coming on. Is Sculpt the right product for that?
We'll start. Then I'll hand it over to David on that one. One of the interesting things when we talk about flexibility, we have the soft product, which is very soft. We have the form product, which has more structure to it. Patients are coming in right now with weight loss. The way we position with the docs is when you look at that patient, do you want a superficial or a deep strategy? Pick between the two. We're already seeing form, in particular, being used for volume loss. The product that has been optimized for that is the Sculpt product. That PMA was submitted in August. We expect that in the second half of 2026. We've started taking advantage of that already. I don't know if you want to add anything to that.
That was great.
OK. I guess one other question. We are running out of time. I want to give Tatjana a chance to pipe in at some point. Obviously, one of the things that we hear about a lot in this space is Biostimulators. When you think about the next area of BD that you could potentially move into, I guess, two questions here. One, what kind of capacity do you have for BD right now? Or do you have an interest in BD, given that you're launching a few products in the Evolus line? Where do we think that the market is going as far as innovation and interesting products to possibly bring into the fold? I think that's for everyone really to opine on.
I can take the first part and then maybe pass to Rui and David. So we do have capacity.
Excuse me.
I'm pleased to say we have capacity to access capital. We have $100 million on our term loan that we can access in two tranches of $50 million each. That comes with no additional covenants or performance triggers. We have said in the past, this is really the capacity we would use for Business Development. The term loan also has a carve-out for a $40 million revolving line of credit. I think we are well positioned. We are also funded to profitability. I feel good about that capacity.
OK. That profitability is scheduled for fourth quarter and on?
For the fourth quarter of 2025 and also for the full year of 2026.
OK, great. Maybe Rui, you can opine on where the interest is and what types of products are sort of coming down the pike that you might be interested in.
Sure. We think biostimulators are a great space to be in, highly complementary to HAs. Obviously, we always think HAs will be the most dominant one in this space simply because they're natural and they're reversible. If you're in trouble, a little hyaluronidase and you're out. Of course, when you use an HA, you get that correction. It's there as opposed to waiting for the Biostimulator. Biostimulators are high interest. We see a lot of benefits to that. Things like skin quality is another area of high interest. Finally, a difficult nut to crack, but hair, of course, is something that's of high interest. It's going to be more described as a moonshot, but it's one of those spaces where you really have to keep your eye on it.
OK, great. I guess to wrap up the whole thing, what can we, you mentioned that fourth quarter is going to be the first indication of maybe some of the leverage that you have for the infrastructure. What should we expect for 2026? I know that you haven't given guidance, but maybe you can give us a little bit of color.
Yeah. I think the fourth quarter and the procedural volume sets the base as we think about guiding in 2026. It is an important quarter in the sense that we expect the market to stabilize. Assuming it does, that sets the right foundation for us, which is an exciting year in 2026 because what we have is an HA product that is off to a great start that benefits from a full year on the market, complemented by the introduction of the flagship product, Sculpt, which we expect in the back half of the year. The market stabilizing gives us inherently a year-on-year benefit of wrapping then around a depressed base of a year this year and an international business that has a lot of growth potential in front of it. After the U.K., the two markets we went direct into are Spain and Australia.
They just hit one year on the market this last quarter. We are going to continue to benefit from those. We went direct in Germany, where we had a distributor market. We took that back and just went direct in the third quarter for the first time. We will benefit from that business continuing to grow. We feel really great about our international trajectory, which also will benefit from the launch of the HA products, the esteem line. All four products are approved in Europe. They are currently in an experience trial. We booked no revenue for it this year. We will introduce those next year. Across the board, we like where we sit. We are not in control of the macro environment, but we are performing double-digit growth in a market that is declining.
To the extent that market improves and you get the introduction of new products both in the U.S. and internationally, it creates a base for us to build from that we exit this year. This is a great space. There is no doubt it has incredible long-term growth potential. We have a new base of expenses when we reduced our expenses by $25 million, which is why we guided on profitability starting in the fourth quarter and beyond in 2026.
Great. I think that's probably a good place to end, given that we're over time now.