STIFEL 2026 HEALTHCARE CONFERENCE - EVOLUS INC

Good afternoon, everyone. Welcome to the Evelis session. It's our pleasure to have Dave Modizzetti, CEO. We actually have the whole team here. Dave Modizetti, CEO, Rui Avalar, CMO, and Tatiana Mitchell, CFO. And as you know, Eveliss is an aesthetics-only company, coining performance beauty, I guess is what you phrased. And, you know it's our it's a pleasure to have you here after you know six six almost seven years after your first launch of Jubeau so maybe you can first give us the overview of the company we can launch into Q&A sure and thank you again for having us it's great to be here just a little bit of background on Eblis we've been a commercial stage company as you pointed out for the last seven years our flagship product Jubea has really led the way for us as we established our beachhead in the United States. We're the fastest growing toxin for a handful of years in the U.S., and we're the first company since the market leaders arrived to achieve a double-digit market share in the space. Over the last 18 months, we've diversified the company in multiple ways beyond a single product. One is we introduced a new line of hyaluronic acid fillers, brand new to the entire world. We introduced it first here in the US called Evalise. Just the first two formulations in our first year on the market a couple more coming over the next few years and we've also built out our international business which is now representing a bigger portion of our overall revenue mix we said we expect it to be 10% of revenue this year and in that international business we've also expanded with our ha products we call them the esteem line of products that introduced that we introduced in Europe in the second quarter so we're just a couple quarters into that launch as well so a lot of really exciting growth opportunities for the company which enable us to partner more closely with clinicians around our cash pay platform and we've seen really healthy growth as you look at the third quarter across all of those areas and we're excited about the future I guess would be the last thing we have a pipeline that has three new products we plan to introduce over the next four years and we think all of present a meaningful opportunity to partner more closely with clinicians as our portfolio starts to capture the key areas that they're using these injectable products and that makes the overall portfolio value proposition more meaningful great great so maybe before we start anything you can talk about the state of the aesthetics market maybe characterize the aesthetics demand particularly the demand that you're seeing the toxins versus the fillers and you know we hear a lot of conflicting statements from different parties, so maybe you can give us your take on it. Yeah, I think we're in a very healthy aesthetic market. Start with the consumer. You have consumer demand for health, wellness, beauty category as you look across the sectors has been very strong this year. Going down to our target demographic, which is a consumer earning about a hundred thousand or more in household income, that consumer is very strong and we don't see that slowing and And you saw that evidence by the toxin market growing, we believe, sort of in this upper single-digit range in the third quarter. Both market leaders reported positive growth in their toxin business. I think those are all very strong signs that the market continues to be really healthy. And then beyond that, the filler market was really the question last year. It had a couple challenging years, driven by some negative consumer sentiment. And then that was compounded by a bit of slowing in demand as well. what we're seeing is that market starting to turn around I would say it's stabilized this year it's roughly flat growing maybe slightly obviously we have a launch product in that market and we're approaching this sort of mid single-digit market share so we're saying really healthy growth but I think it's a very positive sign that the markets now turning in a chase and we believe that sets up really nicely for the next several years just on the filler growth is it more a factor of consumer health or is it a factor of changing trends and now going into it a couple years as it's turning around. What do you think is coming out of that? Yeah, there's likely a few things happening. Number one is the consumer is looking for a more natural look. And what that means is when they're going in and they're getting hyaluronic acid products, which is still the number one use of fillers or hyaluranic acid gels, they're just getting less volume per treatment than what you were seeing post-COVID in the boom where patients were coming in and getting multiple syringes. So we believe that in actual patient volume, the market might be up closer to mid to high single digits. It's in volume of units that you're seeing the market call it roughly flattish. So that's a really positive sign. The second thing we're seeing consistently as we're talking to clinics and we're doing research is that the GLP-1 patient is absolutely entering the clinic. They're referencing volume loss as one of the key areas that they're particularly concerned about. HAs are the only solution that provide an immediate replacement of volume in the clinic. So that positions HAs really well to benefit from that. And then lastly, it's worth noting that Evalisa is still the only hyaluronic acid with a mention of GLP-1s in our label. That's really important, not only because we can market that to the consumer, but when you think about our cash pay co-branded media strategy, where as you purchase more, you get our investment back into the clinic to advertise, we now have billboards and different media solutions around Evelisse that target that segment and we've heard very positive feedback on that it's still early days but we know this is a big tailwind for the category and to be able to invest early days as we build the Eveliss brand is meaningful for these accounts yeah so one of the things obviously is a new product it's clear that you're gonna have above market growth but you've been able to maintain above-market growth for not only Evelisse because you're launching but because of with with Juveau which is six or seven years I've lost track at six or seven years already in the market so have you been able to maintain that above- market growth it's pretty surprising for for a company yeah well I'd start with she was an incredible product and it's the first product that conducted a phase three head-to-head trial against the market leader to date to my knowledge, no other Phase III head-to-head trials have been done that supported the fact that GIVO is a high-quality brand. Separately, last year, there was a stimulus for the brand as well, because independently, a clinician out of the University of Pennsylvania published a head- to-head study of toxins that validated what we observed in our Phase III trials, and that was published in JAMA. And I can reference a number of clinicians that have come to me and said, you know, I hesitated to trial Javeau, but once I read that article, I had to revisit this. So you take the evidence of the phase three trial, now this JAMA article, and there's more coming over time that continue to support that this is a high quality brand. And if you just step back for a minute, you know, I often hear questions are, oh, there's all sorts of new talks in the entrance. You have to keep in mind, if you own an aesthetic practice, this is your gateway procedure. And And if you're going to try a new product, you need to be confident that the product is going to be effective and it's going to produce reproducible results. The reason why Givaud's in its seventh year and continuing to grow at such a healthy rate is because it's a high quality product. Now, we also believe that because of our cash pay strategy where we make the injector the centerpiece in the equation, where we invest heavily in medical education, we'll train nearly 16,000 clinicians, we invest in the co-branded media, and then we have our consumer Rewards Program, which is approaching nearly 2 million consumers, of which almost 70% have come back in for repeat treatment, which signals, again, that the consumer is happy with the product. All of these are foundational elements that keep the business really healthy and strong. And so we're excited about what Javot can do going forward because the product has continued to outperform what we expected going into it. And on the flip side, for Evelisse, obviously, you're a new entrant in the market. and the filler market is pretty crowded. So what has your strategy been there? What has been the resonating message to sort of rise above the fillers, the other fillers? Yeah, and I'll let Rui talk a little bit about the technology. I think that's a starting point because we looked at over 100 hyaluronic acid fillers around the world before we made the decision to partner with Cimetase. And I thinkthat's the starting point to this conversation because just like we should vote five years from now, you'll look back and say, Why is Evelisse so successful? I believe it all starts here with the product and creation. Yeah, I think it really anchors to the concept of going back to natural. And as David has highlighted in the past, we made an active kind of statement that this filler is a hyaluronic acid, which is important to make that distinction as opposed to just using a one-term filler. And then if you think about why hyaluranic acid gels do so well, is because they're full of hyaluronic acid. And hyaluranic acid is this amazing molecule that was designed by Mother Nature. It's a natural compound. And in a word, what resonates well with HCPs and to the patients that hear about it is the manufacturing technology used for this does a really good job preserving that natural HA structure. So that's kind of the opening line, and it works really well with this theme of natural. And then when you reduce it to what happens clinically, the feedback we were getting when we were doing diligence was it's a really efficient material. In other words, you get a lot of correction for a little bit of gel. It's a very dynamic gel, which is what you want. As you move different parts of your face, you don't want something to look out of place. It wants to be dynamic. And those are all virtues that have really come out when they've been used clinically. And then the nuance for the injector, so our customer, whenever you get an HA injectable they ask you how do I use this and what they mean by that is sometimes when you inject these gels will continue to absorb water over time so you have to compensate for that by under correcting so that the gels will swell over time some gels have a lot of what's called free hyaluronic acid so when you reject over the course of the next few weeks a a lot of it will go away so you have to under correct and basically our gel the feedback we got back was we really like the precision of this gel in that you correct to optimal correction you don't have to compensate at all over compensated under compensate and that's another virtue that's really come out when we've put this into the hands of injectors so we've been really happy with that performance and the consistent feedback we've gotten yeah and I guess part of your filler strong filler growth those quarters also because you're starting from ground zero, injecting, not over-injecting, not overfilling and having to correct from that, just starting from scratch and you're following the new trends. That's right. Okay, so after a solid Q3, how are you coming out of Q3 and what gives you confidence into Q4 that you're gonna close the year off very strongly and maybe set up for 2027? I know you're not giving your guidance, but how is it set up? Yeah. So as you mentioned, we had a strong Q3. And in fact, year to date through Q3, we grew 14% top line, and we actually reduced our operating expenses by a bit, right. So it's been a really good year for us. And we look to continue this momentum into Q4. We have reaffirmed our guidance. So on revenue, it's the 330 to 337 million, and that's, you know, 11 to 13% revenue growth. We also reaffirmed our gross margin guidance, our adjusted EBITDA guidance, which is low to mid-single digits for adjusted EBIDDA as a percent of revenue. So really what we were looking at is this momentum coming from the first three quarters and into Q4. Now, as you know, Q4 is the biggest quarter seasonally, right? In fact, today is a big day. We're sitting here on 11-11, and Evalus has claimed 11- 11 as Juveau 11's day for a number of years now. Did you bring any samples by any chance? You know, you're so busy today, but if you were not, there are hundreds of practices across the country doing 11 events today, Zhibo events, and there are thousands of patients getting treated, and we've supported that through marketing and event kits, and it's certainly driving pull-through, right, but it illustrates that importance of Q4, and we've invested this Q4 as we have every quarter to drive that revenue. Great. And I think one of the other, I guess, metrics we're looking at is profitability. So you've now had four quarters of profitability and just, you know, trying to understand how much of that is the operating leverage versus just growth and cost controls. Like, how is that all materializing for you? And do you see this as being sustainable at this stage? That's a good question. And if you take a step back and if you look at what we have built over a number of years now, is this commercial platform right and it includes not only the sales and the marketing teams but also the medical education which reruns we have a very robust technology platform that is used by our customers and consumers we have the loyalty program for customers as well as a consumer rewards program so all of this is in place and we are now selling a portfolio so as we add additional products we're able to leverage this platform so as launch sculpt for example of course we will invest in that launch but we don't need to rebuild commercial capabilities or build new ones and you can already see with evalise in 2026 you mentioned right we had the four quarters of adjusted ebitda profitability it's a proof point it's significant proof point that we're able to add to the bag for the reps that were able to leverage all these commercial capabilities both in the us and internationally to drive revenue but also drive substantial operating leverage Yeah. Maybe you can share some metrics with us regarding how much the Evelisse launch has helped your JUBO penetration. I know that one of the interesting dynamics is that some patients, sorry, some injectors are capped in the amount of JUBO they can purchase because of other loyalty programs that they have. But how has that changed the percent penetration in each of the specific practices, because now you have your own loyalty program with Evelisse and Chabot contributing. Yeah, David, do you want to take this? Or bundling program, rather. So I would say, as a starting point, the Chabots being well-established enabled Evelise to gain immediate trial. You can see that in just five quarters since launch, over 3,500 facilities have now purchased Evelies, and our reorder rates are tracking closer to now Jouveau levels with Evelisse, which shows that not only are we getting it in the door, but we're seeing really healthy reorder patterns. All of that, despite the fact that we only have our first two formulations, and we're competing in a market against three established families of fillers that have their full line. And so we think there's an incredible opportunity in front of us because of the comments Rui made around the differentiation of the gels. And as Sculpt enters, which we believe will be the flagship product next year, and the Lip product the following year, this rounds out our portfolio and gives us deeper engagement with these clinics on the HA side, where we consistently hear, give us your Sculp product, get us the Midface product, and we can move our filler business over to you entirely. Where it's hard, we can't do that today, because you don't have that Midface option for us. And that's such an important part of this market. For some manufacturers, the mid-face gel might represent as much as half of the value of their HA revenue, just to give you some level of context for how meaningful Sculpt is. And so we're excited about what we're doing today. We're excited the feedback we're getting, and we're equally as excited about the new product launches we'll do for the overall portfolio. Now getting back to what does that mean for Jouveau, in the front half of year, we introduced portfolio rebate for our accounts and those accounts that participated in that program they were the fastest growing part of our business which is an early signal that customers want to partner with us more closely when we have the full line and that is where you're going to see robust growth going forward and that evolution of our portfolio and the way we partner with them is going to be something to watch really closely for competitive reasons we don't get in all the details of how we navigate through the portfolio but it's well known that that that is how the established players protect market share through those bundles and we see it as an opportunity for us to become an entrant that could become a more meaningful partner these clinics how much more do you have to penetrate in your um present accounts um that you're working with i mean i think you're in what was the last number was 19 000 accounts um how much more is you vote penetration you get from those versus needing to add more accounts yeah That goes back to your growth question around Jouveau. We see an incredible potential to go deeper within existing accounts where, let's just say on average, we track it roughly in the 20s market share with Jouveaux. And when you talk to clinics who have that sort of usage of Jouveux, that would generally make us a number two option in the clinic, that they would love to make Jouveault a bigger part. But in order to do that, they would have to be able to move more of their HA business over to us to unlock that Javot share. Otherwise, it's punitive to those clinics to increase their Javots share because their price on their other products would go up with the competitive set. So we see a lot of ways to navigate through it. Now, adding new accounts is a long game for us. You've seen over the last seven years, we consistently add 500 or more accounts per quarter, and that's why we've been able to build our account base up to 19,000. We have a very systematic approach to this, and there's a protocol for when we bring on new accounts, how we want to engage them with the company so they can learn about our cash pay advantage. It's music to my ears when I hear from investors that they'll talk to clinics and they'll say, what makes Evelis different? And what you'll generally hear back is, they have great products and they just do business differently because they're a cash pay business. And that is what we've been building and that wasn't well understood the first couple of years. That is the moat that differentiates this company and we're continuing to build now products around that. And I think probably what's underappreciated is our entire pipeline are injectable products that go into the same hands that are using Jabot that will be using these future brands. And the entire value proposition is built around that injector as the core focus of ours. And we think that drives more loyalty across our portfolio as we execute on it. Great. Can you talk about how your new bundling program works with the Evolux co-branding program that you have, EvoLux, well, first of all, maybe you can share what the EvoX program is, because that's also a unique proposition, but how does now the bundling program work in tandem with that? Sure. So if we think about the bunding, we're still very early if you compare to our competitors who are in a scale of one to ten, a nine or a ten, we are still very early in that bundling where we're really offering a growth rebate and we ran it as a six-month program in the first half of the year and we're repeating that now in the second half and also piloting something for kind of the next level of accounts so it really is complementary to the evalux program we're based on the level of purchasing or accounts or earning benefits including the co-brand media okay and um just to describe the co branding is it still as utilized as it was prior to starting the bundling program are various injector injectors aiming to get onto the co-branding program as much as they had been a year ago yeah and it continues to evolve as you can imagine so for example when we introduced evalise it does a glp-1 on the label And so we were able to run CTV campaigns that are local with the practices, right, including Evalis and that GLP-1 component. So there's always evolution in it, but the practices do look to earn that benefit. And the one thing I'd say for those of you who live in and around this area, if you took the subway, you probably would have seen some of our Evalus ads in partnership with some of the clinics we work with. If you drove in from outside the city, you'd probably have seen in some of billboards that mentioned GLP ones on your way in. And if you go on the social media right now, there's, as Tatiana pointed out, hundreds of practices that are directly advertising our 11th day, because it's the single biggest event of the year. So the noise is amplified all around, but it's always specific to a clinic, partnering with our brand, going after a consumer. It's only growing. Got it. We can also talk about how your consumer, your Evelis Rewards program, which is a consumer program, how is that different from what others are offering right now? So the Evels Rewards Program was the first SMS-based program. So many of you belong to airline programs and you know you go online, you have to fill out a long sheet of information in order to enroll. We wanted to make it frictionless. So it's all text-based. It takes seconds to enroll in our rewards program. But what's unique about it is, once you get treated and you earn $40 off every treatment, whether you're getting Javeau or Evelisse, you get $40 of each of those brands. But once you've hit a window between treatments, for Javeaux it's at 90 days, we'll send them a reminder to go back into that clinic. It's a co-branded text with our brand and the clinic that they went to to go in and earn the $40 rewards. So it's unique in that it's simple to execute because it's SMS-based. The credit, the account level happens all through our digital platform, so it's frictionless. And then importantly, we're the only ones that are advertising that clinic back to that consumer, which is really important to these small business owners that they know that it's not just a Jouveau benefit, it's a Jiveau benefit in that clinic that they want that consumer going back to it. We believe that is why you're seeing nearly 70% reorder rates, because clinics like our program, it aligns with their goals. I want to go to Sculpt for a minute and the Evelisse line. So I know that Form and Smooth have been the two products you have available right now. And I think in the past you've said it probably covers 80% to 90% of procedures. But Sculipt is really probably going to drive more of it. So can you sort of explain the disconnect there? How 50% of revenues comes from a mid-face injector? So help us understand the dynamic there a little bit and how important Sculpt is to the story. Rui. Rui, that's you. Oh, 50% market share, okay. Well, Sculp does something that the other products don't do in our portfolio. It has much more of a projection. This HA is a, to use a layman's term, it's a harder material, and it's an elastic material, so you can create this projection. It's just an engineering that isn't in the other projects. when we talk to folks form is kind of the product in the middle which is why we always position the most versatile it kind of sits right in the middle of that spectrum of more elastic harder softer more liquid like forms right in middle so you can flex it up or down we believe once sculpt comes in at least the word that we've gotten from a lot of folks is they're looking for something with the higher projection and then I think what you're going to see is form will take on other duties but we don't see any cannibalization in that way we just see it being used and continue to grow in different ways I'll give you an example we talked about GLP ones one of the things that we find is when you're looking for someone who's trying to address the midface create a kind of a jawline or create a higher arch that sculpt product fits really well obviously for GLP one people will think intuitively that that's your go-to but that's kind of a starvation state and one of the things that we get pretty consistently as a number of those patients have a really poor skin quality or their their skin just is is of a nature of a tone that sculpt would actually be too robust so now we're actually finding his form actually for some patients is just absolutely right for some of those patients so it's just kind of market that will continue to expand in terms of utility and usage okay well you just talked about skin quality so that's a good segue to the new product that you've brought in um that's still in development but what can you talk to us uh what can you tell us about profilo am i saying that correctly okay i'm not profilo it depends on what part of the world we're in right we're italian it's definitely the way you said exactly um so our just to use the same language the ha's that we have right now the evelisa steam line they're cross-linked and and they're engineered to do structural things. Profilo is not cross-linked with a traditional cross-linker. The chemistry there is very different. It's really unique. They intertwine high molecular weight HA with low molecular weight, and they use these very kind of weaker hydrogen bonds. And the reason that's important is you're not trying to create structure. What you're trying to do is leverage HA's ability to absorb water. And the best way to describe the distinction profiling the Evelisse line is, Evelise is, you know, for volume, efface wrinkles, create midface. Profilo is meant to hydrate your skin from within. Think about that, you know, basil plant that you may have at home, you forget to water it. When you water it, it comes back to life. That's what Profilo does. And it's put into the dermis, and its engineering is to bring water and kind of rejuvenate the tissue. And then there's other benefits. It'll stimulate collagen, elastin, a bunch of different things but it fits really nicely within our portfolio and is complimentary because we didn't have a product that did that and then the last comment I'll make is if you go to Europe you'll find that this is the market leader when you look at skin quality and we just came back from ASDS and it's been really interesting to to see how many derms have been very excited about bringing this and the other comment was how many terms shared with us that Profilo is one of the products that patients come in asking for that they actually hadn't heard of. So it's gotten a lot of a lot of interest. And I guess one other area and you're not in it but how do how does the I guess the movement towards bio stimulators affect your opportunity and do you need to be in the bio stimulator market now or are you okay with skin quality in the Evelisse line? So from a pipeline we always said you need a botulinum toxin first as an anchor and then you need a really good HA line which is what we got and then from a BD perspective we spoke of interest in skin quality we've just done that one hair we just announced that one and we've expressed interest in bio stimulators. Bio stimulators are really important part you know they they do something they by By their very nature, they stimulate collagen. We've seen the market swing from HAs, got to move away from them, to biostimulators, and what you're going to see, our predictions, it'll swing back to the middle. HAs correct. You get tissue and volume correction that biostimalers just can't do, and it's an immediate gratification. Having said that, biostimaulers have a role because sometimes you want to stimulate the collagen, so there's absolutely a role there. We remain really interested in that space, and like we've done our approach with other BD opportunities, we're looking for the right asset, and that chemistry exists. The chemistry that's out there right now is 25 years old, and it's well-established. It does well. We think there's an opportunity to potentially improve on that, so we continue to look for the right biostimulator at the right deal structure. Got it. While we're talking about the pipeline, you might as well talk about the hair rejuvenation. Sure. So from our lens, if we were going to enter into hair, we had some very strict criteria. One was we wanted to work with compounds that are known to grow hair. So take the drug risk out of the program. Two, we really wanted it to be locally administered. In other words, it had to be a procedure. It needs to be located injected by our providers. We didn't really want to compete with the telemedicine or prescription, and three, we really were looking for a timing interval that made sense. Our patients like to come in every three to four months, so we were trying to look for a platform that would lend itself to bringing the patients back every three or four months and that's effectively what we've done. We now have a deal where we're working with known small molecules and we are creating formulations right now and we're trying to create a formulation that eludes over the course of about three to four months in other words the patient comes in and our customer the injector does a procedure every three four months complements their cadence of seeing patients and then the the nice thing we like about it is we think it's we've really mitigated a lot of the risk because we would not trip into a full development program until we actually see the human data which we anticipate is around end of 2028 okay okay well you just brought up 2028 so why don't you tell us about the guidance and whether it's on track for 2028 of any of the assumptions for underlying growth giving you reason to rethink the 2028 guidance I know that it was brought down at the beginning of the year based on growth rates is that sort of shifted a little bit as the market is sort of recovering yeah yeah it's interesting as we set out that guidance in the beginning of this year right we said we're going to see the toxin market have a healthy growth mid single digits perhaps high single digits and that's exactly what we're seeing and then the filler returned to flat maybe you know slight growth and again that's exactly what they're seeing so in terms of the market it's very supportive and then big components of that 2028 guide are of course the launch of sculpt which we expect in 27 And that, as we talked about, addresses 40% to 50% of the market, and then rounding it out with LIPS in 28. And international as well, we just got the rights to Esteem in Canada, Australia, and New Zealand. We expect that approval to happen by 28. So effectively in 28, you see us selling the full portfolio, toxin fillers in all of our geographies, right? So that's an important year for us. And then 27 is a transition to that. Okay. And so over the course of the next year, what should we be watching out for to see that everything is on track? Yeah, it's the same performance metrics that we've been outlining. Clearly, the base business, we expect it to continue to grow at a healthy rate. The international business will continue to be a key growth driver for us. And not just base Avalice, but the introduction of Sculp is a meaningful boost in the arm for our growth rate. But just recognize we're launching in the first quarter. It's going to take time to ramp it up to build that confidence. But interestingly, we mentioned Europe, where we launched all four HAs at the same time. Within a quarter, Sculpt became the leader in terms of the product that clinicians started using. So it stands on its own. It's very clear that that's our flagship product. So we're really excited to introduce that. Of course, we'll be updating on metrics around that once we get it through Google. So maybe Sculp launches a little faster than you're saying. Okay, no comment. All right, I think that's all we have time for, so thank you very much for your time, and I guess we'll be watching for the approval. All right. Thank you, Annabelle. Thanks.