EOLS - NASDAQ

Good afternoon, everyone, and thank you for standing by. Welcome to Evolus' Fourth Quarter and Full Year 2023 Earnings Conference Call. As a reminder, today's conference is being recorded and webcast live. [Operator Instructions] I would now like to turn the conference over to Nareg Sagherian, Vice President and Head of Global Investor Relations and Corporate Communications. Please go ahead.

Thank you, operator, and welcome to everyone joining us on today's call to review Evolus' fourth quarter and full year 2023 financial results. Our fourth quarter and full year 2023 press release is now on our website at evolus.com. With me today are David Moatazedi, President and Chief Executive Officer; Rui Avelar, Chief Medical Officer and Head of R&D; and Sandra Beaver, Chief Financial Officer. Before we begin our discussion, I'd like to note that during our call, our prepared remarks will include forward-looking statements within the meaning of United States securities laws and management's additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current assumptions and expectations of future events and trends, which may affect the company's strategy, operations or financial performance. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this call, and the company undertakes no obligation to update or review any estimate, projection or forward-looking statements, except as required by law. These forward-looking statements are based on estimates and assumptions that, although believed to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. A detailed discussion of the risks and uncertainties that the company faces is contained in its annual report on Form 10-K, quarterly reports on Form10-Q and current reports on Form 8-K. Additionally, today's discussion will include non-GAAP financial measures, which should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results may be found in our earnings release, which was furnished with our Form 8-K filed today with the SEC and on our Investor Relations website at evolus.com. Following the conclusion of today's call, a replay will be available on our website at evolus.com. With that, I'll turn the call over to our CEO, David Moatazedi.

Thank you, Nareg. We are very pleased to report on another record quarter and 2023 full year results while consistently focusing on delivering on our long-term strategy of leading the performance beauty market. Our focus is consistent and purposeful. We are building a beauty brand primarily targeting millennials who represent the fastest-growing segment of the neurotoxin market and are known to influence adjacent generation. Our differentiated approach has resulted in Jeuveau becoming the fastest-growing toxin in the United States aesthetic market for the third consecutive year. During the year, we achieved several major milestones, including the strong execution in the U.S. with our neurotoxin, the global expansion of our neurotoxin into Europe and the addition of our novel dermal filler line. As a result, we increased our total addressable market by 78%. We now view our addressable market to be approximately $6 billion and comprised of three distinct segments, including two segments where we currently have little to no penetration. The first segment is the U.S. neurotoxin market of $2.6 billion value, which is projected to grow at high single to low double-digit growth rates for the upcoming five years. We are celebrating our fifth year of Jeuveau being on the market in May, and are proud to have achieved double-digit market share despite new competitive entrance. The second segment we plan to enter in 2025 is the U.S. filler market, which we estimate is a $1.6 billion market growing at a similar rate to toxins with a clear overlap in our current customer base. And the last segment is the international market, which represents $1.8 billion, having doubled with the addition of the dermal filler product line, and we expect to have a presence in countries representing more than 90% of the total addressable market by 2028. In addition to our market expansion, we executed on the R&D front with our Phase 2 extra-strength Jeuveau study, which proved 26 weeks of duration providing our growing consumer base the option of a longer-duration formulation. In the U.S., we added nearly 3,000 new accounts to end the year with more than 12,000 total purchasing accounts. And we exited 2023 with 750,000 consumers in our Evolus Rewards Loyalty Program, which grew by 55% over the prior year. And importantly, consumers receiving repeat treatments represented 60% of the total redemptions in 2023, up from 50% in the prior year. These milestones reinforce the global demand for our consumer brand, the high quality of our products and the competitive moat we built as the first company focused on cash-based aesthetics. Continued gains throughout 2023 position us to provide 2024 revenue guidance of $255 million to $265 million, representing a 31% growth at the top end and is from our announcement in January. This top line performance, coupled with strong disciplined focus on operating expenses, is why today we announced our revised outlook on profitability, which now assumes we achieved profitability in the fourth quarter this year and for the full year in 2025. Further, these milestones are indicative of the progress we are making toward reaching our long-range guidance of at least $700 million in revenue by 2028, a compound annual growth rate of 28%. Now I'll get into a high-level view of the financials, which are unchanged from the preliminary results reported on January 16. In 2023, we achieved a record global revenue of $61 million for the fourth quarter and $202 million for the full year, representing 40% and 36% growth over the prior year, respectively. The full year results surpassed the top end of our guidance of $198 million due to our growing consumer demand and continued market share gains. Our fourth quarter revenue increase of 40% over the prior year quarter and 22% sequentially were both multiples above the estimated industry growth rate. And importantly, our back half growth accelerated meaningfully above the first half, driving continued market share gains with Jeuveau and resulted in our market share, achieving 12% in the fourth quarter. Looking to our International business. We continue to expand our global footprint with the success of Nuceiva and announced our licensing agreement with SYMATESE in December to exclusively distribute dermal fillers under the brand name Estyme in Europe. This is a significant agreement for Evolus, doubling our total addressable international market to $1.8 billion. Now I'd like to turn the call over to Rui to discuss the dermal filler line and review the accompanying slides posted to our Investor Relations website.

Thank you, David, and good afternoon, everyone. As David mentioned, I'd like to share with you an update on the Evolysse/Estyme filler product line. Estyme is the name we use in Europe, and to make it simple, I'll refer to the line as Evolysse on the call. Going to Slide 2. The Evolysse HA filler manufacturing process uses a unique coal technology, which helps preserve the natural HA molecule structure, the building block of HA gels. Then each one of the HA products undergoes a specific manufacturing process, creating an optimized gel product for the target indication. Last month, the largest aesthetic meeting in the world IMCAS took place in Paris, and we'd like to share with you some of the clinical data shown there. Slide three. The data for Lift from the European Nasolabial full trial was presented and as a reminder, in the U.S., the two lead products are smooth and lift with an expected PMA filing with the FDA this summer. The study was double-blind, randomized, multi-center, enrolled 45 patients, a split-based design and used Restylane-L as the active control compared to Lift. The average volume injected and the baseline severity of the nasolabial fold scores were similar in both groups. The primary endpoint was non-inferiority comparing the improvement in the NLF severity scores at 4 weeks between the two products. The difference was minus 0.16 in favor of Evolysse Lift and the upper bound of the 95% confidence interval was 0.03, successfully passing the primary endpoint. Of note, the confidence intervals cross 0, demonstrating equivalence between the two products. The graph on the right illustrates the change in the NLF severity grade from baseline out to nine months. Note that despite similar volumes injected at the initial treatment, Evolysse Lift seems to have more pronounced effect at all time points, numerically and reach a statistical superiority at three and six months. Slide four, the graph on the left illustrates the percent of responders with at least a 1-point improvement over time using the NLF scale as assessed by the investigator. At nine months, the patient responder rate was 31% for Restylane-L and 46.7% for Evolysse Lift. The global aesthetic improvement scale on the right assesses the actual aesthetic outcome after treatment. The investigator scores are high throughout the study, but more importantly, the patient's own assessment of their respective aesthetic outcome was also high right to the end of the study with Restylane-L at 77.8% and Evolysse Lift at 82.2%. Slide five. SMOOTH is a softer product than Lift and can also be used in nasolabial folds, providing a second option in the area. In Europe, SMOOTH was also studied for the treatment of fine lines around the mouth or Perioral lines. This was an open-label, 61-patient study using a validated scale and measured the severity grade improvement of the fine lines over time. Fine lines are difficult to treat since the product needs to be placed superficially and only small volumes can be used. Here, we can see the results all the way out to one year with only half a milliliter of SMOOTH injected. Slide six. The scope product is halfway through its clinical trials in the U.S. In Europe, a 60-patient no control study followed the 3D volumetric correction of patients for 1.5 years. A little over 1 ml was injected into each sheet then using a special system, the 3D volume of the treat was measured. We see here an initial correction than a stable correction from 6 to 18 months at the end of the study. Slide seven. Lift of our particular interest to Evolysse as this is a popular lead indication for millennials. In Europe, 72 patients were enrolled in a single-arm study and their lip fullness was assessed using a validated score, a scale over the course of one year. Although not a head-to-head study, to provide some context, we've included the study results from the Emervel lip study, a product known as Restylane Kysse here in the U.S. It's interesting to note that the volume of product used in the two studies is different. One ml of Evolysse Lift was used at initial treatment and no touch-ups were allowed. In the Restylane study, 1 ml was also used at the time of the initial treatment, but a touch-up was allowed increasing the average amount of product received by each patient by 30% for 1.3 ml. Looking at the results over time, despite requiring less product, Evolysse Lift seems to provide more of a correction and lasts twice as long. Slide eight. The global aesthetic improvement scores were high throughout the duration of the trial for both the investigator and the patients. At the 1-year mark, 88% of the patients rate themselves are still having an effect. Slide nine. In summary, we now have the rights to the Evolysse/Estyme filler line throughout Europe and the U.K. We expect to receive European approval for Smooth, Lift, Sculpt and lips in the second half of this year under the new MDR approval process. Of note, Lift is already approved in Europe under the past MDD process. In the U.S., we remain on track. The first two products, Smooth and lift, the last patient just completed the trial this week. We plan to present the top line results for this U.S. pivotal study this summer and submit the PMA to the FDA with an anticipated approval in 2025. Sculpt is halfway through its pivotal trial, and we expect approval in 2026 followed Lips and Eyes in 2027. Moving from Evolysse, as Evolus continues to lead our portfolio with its precision profile, and we recently completed our Phase 2 Jeuveau duration “extra-strength” study, demonstrating extended duration of 26 weeks and expect the results to be published in a peer-reviewed journal this year. With that, I'll turn it back to you, David.

Thank you, Rui. I could not be more proud of what our R&D team has accomplished in the short period of time, particularly the head-to-head study with our Lift filler compared to Restylane, which demonstrated statistical superiority at multiple time points. As Rui stated, we have now completed the last patient visit for both Lift and smooth fillers in the U.S., with plans to file with the FDA this summer. As a reminder, the Lift product will be positioned as the most versatile and highest-volume filler in the product line. In Europe, we're expecting all four filler products to be CE Mark approved by end of the year. This puts us on track for the global launch of our filler line in 2025. We remain excited about the differentiation of Evolysse and its potential to become one of the leading HA fillers in the U.S. These products were designed to be the next-generation fillers by the scientists that develop the market-leading Restylane products. Our cash pay focused platform was designed for scale, and there are tremendous synergies we can achieve by leveraging our seasoned sales force and our rapidly growing customer loyalty program to launch this innovative new filler technology alongside our flagship Jeuveau in the U.S. and Nuceiva in Europe. It's also worth noting this was a highly capital-efficient transaction for Evolus. Now I'll turn it over to Sandra, who will cover the financials.

Thanks, David. I would like to begin by congratulating the Evolus team for the outstanding fourth quarter and strong finish to 2023. Before we review the results, I would like to highlight two significant achievements for the fourth quarter. First, excluding share issuance of the European filler agreement, we achieved profitability, defined as positive non-GAAP operating income. And second, we delivered positive cash from operations. These are significant milestones towards achieving our updated guidance of profitability in the fourth quarter of 2024 and for the full year 2025. These achievements would not be possible without the efforts of the entire Evolus team, and I would like to sincerely thank them for their hard work and dedication. Now turning to our results. Consistent with what was reported in our January announcement, global revenue for the fourth quarter was $61 million, up 40% compared to revenue in the fourth quarter of 2022, with U.S. sales comprising more than 90% of the total revenue and driven primarily by higher volumes. For the full year, we reported global revenue of $202.1 million, a 36% increase over full year revenue in 2022 and above the top end of our guidance of $198 million. We continue to experience strong pricing in the U.S. with our average selling price in 2023, remaining stable compared with the same period last year, while our customer reorder rate remains at approximately 70%. Our reported gross margin for the fourth quarter was 57.2%, and our adjusted gross margin, which excludes the amortization of intangibles, was 68.4%. For the full year, reported gross margin was 68.1% and adjusted gross margin was 69.5%. Adjusted gross margin, which excludes the amortization of intangibles, is aligned with company guidance of 68% to 71%. Our GAAP operating expenses for the fourth quarter of 2023 were $70 million compared to $63.5 million in the third quarter 2023. Non-GAAP operating expenses for the fourth quarter were $45.5 million compared to $40.3 million in the third quarter. Our fourth quarter GAAP and non-GAAP operating expenses included $4.4 million of IP R&D expense related to the share issuance for the European filler license agreement. Operating expenses were $251.3 million in 2023 compared to $213.9 million in 2022. Non-GAAP operating expenses were $163.9 million in 2023 compared to $137.7 million for 2022 and in alignment with the company guidance range of $160 million to $165 million. Non-GAAP operating expenses exclude product cost of sales, stock-based compensation expense, revaluation of the contingent royalty obligation and depreciation and amortization. Reported selling, general and administrative expenses for the fourth quarter were $43 million compared to $43.3 million recorded in the third quarter. This quarter, SG&A expenses included $4.1 million of noncash stock-based compensation compared to $4.3 million in the third quarter. SG&A expenses were $155 million in the full year 2023 as compared to $141.8 million in 2022. Our non-GAAP loss from operations in the fourth quarter was $3.7 million compared to $5.7 million reported in the third quarter. With this $2 million sequential improvement in the fourth quarter, Evolus delivered our lowest non-GAAP operating loss since inception. Excluding share issuance for the European filler license recorded as IPR&D expense, the fourth quarter non-GAAP operating income was a positive $0.7 million, representing continued progress to sustain profitability. Non-GAAP loss from operations for the full year excludes stock-based compensation expense, revaluation of the contingent royalty obligation and depreciation and amortization. Turning to the balance sheet. We ended the year with $62.8 million cash compared to $38.7 million at September 30, 2023. In the fourth quarter, we had a record low quarterly cash use of $0.9 million, excluding the $25 million tranche drawn under the Pharmacon line of credit and generated cash from operating activities of $0.8 million. Net cash used in the fourth quarter of 2023 continued its sequential quarterly decrease throughout 2023, further demonstrating our continued progress towards cash flow breakeven. Given the capital-efficient nature of our filler agreements, we continue to expect our liquidity to fully fund us the profitability and beyond. Before we turn to Q&A, I would like to summarize our 2024 guidance. Total revenue for the full year of $255 million to $265 million, this equates to 26% to 31% growth for the full year. Adjusted gross margins in the range of 68% to 71%. Full year 2024 non-GAAP operating expenses between $185 million and $190 million. Profitability, defined as positive non-GAAP operating in the fourth quarter of 2024 and for the full year 2025. As a point of note, due to onetime filler launch expenses within 2025, profitability may not be achieved every quarter. Other modeling assumptions for 2024 include quarterly interest expense of $4.4 million and full year weighted average shares outstanding of approximately 57 million. Looking beyond 2024, we continue to target total revenue of at least $700 million in 2028, driven by continued growth in share gains in our neurotoxin business in the U.S. and international markets along with the growing contribution from our line of fillers that begins in 2025. This equates to a compounded annual operate of 28% on a total addressable market of approximately $6 billion today, growing to approximately $10 billion in 2028. Now let me turn the call back to the operator to begin Q&A.

[Operator Instructions] Our first question comes from Annabel Samimy with Stifel. Please state your question.

Hi, thanks for taking my questions and congratulations on some interesting data. So it looks like we're getting pretty close to commercial launch of the Evolysse and Estyme product line. So, I was wondering if you planned on implementing any bundling like programs initially when you launch Evolysse or keep it independent until we gain some traction? And I guess I was just looking on any thoughts around your strategy there. And I guess -- secondarily, I guess I want to understand the color that drove your accelerated increase in accounts. And do you expect this to be sustainable? And do you have any type of target penetration in terms of the accounts that you want to reach before you focus more on just penetrating more deeply into these accounts versus broadening out? So those are a few of my questions, and I can get back in the queue. I always have more.

Well, thank you for the questions, Annabel. Let me start with our current business, and then I'll address the Evolysse question second. As far as the increase in the accounts that you saw in the back half of the year, it accelerated over the front half. If you look even further back, into 2022, you saw an accelerating trend that started to form before that as well. And I think from our standpoint, it's just an indication of the increasing interest in partnering with Evolus. We don't have any additional incentives our sales force to expand the number of new accounts that we're getting each quarter, it’s just a function of the demand that we're seeing in the market. So we're really pleased to see that increase. Now despite all that, we finished 2023 with 12,000 accounts in a market with over 30,000 purchasing customers. So as you know, we still have a significant opportunity to continue to go wider which we anticipate will be an effort over the coming years as we continue to expand our footprint and build our trust with these practices around the country. Now as far as going deeper, that is an initiative as well within our existing customer base. We do stratify our customers based on our tiers, which we call Evolux and the top tier of customers certainly get more attention from our sales force. They also earn more benefits in the co-branded media program. And those activities have us engaging with these practices more. And what we did observe was that our existing base of customers were growing at a healthy clip. As a matter of fact, growing at a significantly faster clip then the market more broadly. So that gives us a very good confidence in the fact that our share gains, even in established customers still has a lot of opportunity for growth. In addition to that, I think that kind of dovetails into your question around Evolysse, which is you asked around bundling. I think what we've done that's different with our offering to customers is that we do have pricing for our brand Jeuveau. And as you purchase more, you get benefits for the pricing, just like every other company in this space does. But what we've done that's unique is as you purchase more from us, we reinvest back into the practice through co-branded media. We do believe that, that reinvestment helps partner with these practices, it helps them to grow and it also helps drive our own brand awareness. And that's the type of partnership that we want to forge over time across our portfolio. So as we look ahead to Evolysse clearly, that is launching in the filler market is a different category. It's one we have a lot of experience in as a management team. And we recognize that the needs are different in that market. However, the common element is the interest in these practices to grow and to build their brand in partnership with us. And so we anticipate the co-branded media will be an umbrella that carries across our franchise going forward. But as far as what we might do with pricing, I think it's probably too early to get into that level of detail now.

Okay, great. And if you could just share, do you have a sense has a market share within the Evolux practices increase given that you've got much more significant growth in those practices that you do in the -- for the broader market?

Yes. It's hard to quantify exactly what our shares across practices. We do know that, as we commented in my opening remarks that overall, in the fourth quarter, we believe we achieved a 12%-unit share. That's the highest unit share we've achieved since launch. We achieved that partially driven by our account penetration to the 12,000 customers and also due to going deeper with an existing customer. So it's hard to say exactly where we sit overall within the existing 12,000 customers that are purchasing Jeuveau. The last update we gave was we thought we were around 20% to 25% market share. We expect to be above that. I just don't have an updated number to give you at this time.

Okay. Great, thank you.

Our next question comes from Marc Goodman with Leerink Partners. Please state your question.

Yes, thanks for taking my question. This is [indiscernible] on the line for Marc. So regarding 2024 sales guidance, can you talk about the growth driver in your assumption, like provide color on what percentage contribution from values versus pricing and maybe remind us the discount relative to botox. Thanks.

Yes, of course, thank you so much for the question. As it relates to our 2024 sales guidance, as we delivered in 2023, significant growth at 36%, right? We see a great opportunity to continue to leverage that back half accelerated growth into 2024 with the guidance that we gave at $255 million to $265 million. As we noted, the majority of our revenue performance came from volumes. However, we continue to see stability in price and the opportunity to potentially raise price and continue to close the gap between Jeuveau and Botox. The majority of our growth in 2024 continues to be driven by volume. As David mentioned, we're significantly underpenetrated in the market, whether it's within the accounts we currently sell in or by adding new accounts available to us across the U.S. But we also see an opportunity to continue to press price where it's appropriate.

Thanks, very helpful.

Our next question comes from Louise Chen with Cantor Fitzgerald. Please state your question.

Hi, congrats on all the targets and thank you for taking my questions here. So I wanted to ask you, is there any way you can quantify or at least qualitatively tell us how profitable you expect to be in the fourth quarter? And then how are you thinking about ASP in 2024 for Jeuveau? And what are you factoring into your guidance there? And then lastly, just when we model out 2024, how should we think about seasonality bridge? Thank you.

Okay. Great. Louise, let me take the first part around how you think about the pricing for 2024. I think as Sandra just commented, our pricing has been very strong. Since launch, our ASP has only gone up for this product. And I think as we continue to shift our focus on the value we're bringing to customers, we continue to reassess how we can continue to narrow the gap versus the market leader. And we've seen more and more price competition, and we continue to build our pricing favorably in order to drive the volume. And we'll continue to do the same. As you think about this year, it's predominantly driven by volume and not price. I think that's the case for the entire category, frankly, but you should expect that prices are steady and up for us over time.

Louise, as it relates to your other question on profitability, I think as you can imagine, we outperformed our own expectations here in the fourth quarter of 2023, delivering well above the top end of our guidance. And excluding the share issuance related to our European filler license, we have frankly achieved profitability here in Q3 2024, excuse me. So as you can imagine, that creates a great foundation for us to build off of and gave us the confidence we needed to deliver the revision to our guidance for 2024, where we are confident we'll achieve that profitability again in Q4 2024. As it relates to how much profitability, I think we'll continue to assess that throughout the year, but we have great momentum going into 2024, and we continue to have disciplined operating expense management. So that enabled us to give us that revised guidance.

Anything around seasonality?

I think seasonality has been fairly predictable in this market if you back out the one COVID period that we were in. And you should -- we expect to see similar trends where the fourth quarter will be the strongest quarter of the year, followed by the second. And then generally, the third quarter is the weakest season of the calendar year. We're expecting it to mirror that this year.

Thank you.

And our next question comes from Navann Ty with BNP Paribas. Please state your question.

Hi, everyone thanks for taking my question. I was just curious if your guidance includes some upcoming competition from -- in the U.S. from Gel and Galderma. Thank you.

Yes. As you know, this earlier this month, Hugel received FDA approval for Botulinum Toxin Letybo. We were aware of their PDUFA date. And we had assumed in our guidance when we provided that in January, that they would be entering the market in 2024. So nothing changes as far as that guidance. As you know now, we had a new entrant in late 2022. And of course, you saw our performance last year where growth accelerated in the back half of the year despite a new entrant coming in the market. And of course, this year, we'll likely see the entrance of Hugel with Letybo. And as you may know, we are launching in Europe around the same time as Hugel, the Letybo product, and we've continued to very well in those markets. look, there's plenty of room for new competitors. This is a high-growth market. I think what's unique is our value proposition in the market, and we'll continue to build on that, and we believe that will drive meaningful growth in the future.

Thanks, that’s helpful. Thank you.

And our next question comes from Serge Belanger with Needham & Company. Please state your question.

Hi, good afternoon and thanks for taking my questions. First one, I guess, regarding the number of new account additions in the fourth quarter, a pretty big number that was larger than I think the average for the first part of 2023. Is that sustainable going forward? And then secondly, I think we're nine weeks or so into the first quarter, can you give us any color on what the market environment is like in terms of volumes and things like that? Thanks.

Sure. Good question about the account adds. We went into the year last year, assuming we'd be adding roughly 500 to 600 new accounts a quarter. So we were equally, frankly, as impressed by the numbers that the field brought in of new customers. We don't have a set number that we require in terms of new accounts per quarter. So I can't commit to the number of account adds. I think it's dependent on the territory and the opportunity in front of them of spending their time going deeper with customers or just the interest level that's coming in from new accounts. As you may recall, when we acquire new accounts, we educate them on not just the product, but we send in training as well so they can understand the unique precision profile of our brand. We also review our benefits through co-branded media and Evolux, and it generally takes about 12 months for a new account to become meaningfully productive. And so that cadence is important to us because we want to ensure that each customer has the Evolus experience. And so we'll continue to add new accounts as we receive them, but we're limited by just our ability to run them through the proper steps that believe, lead to a productive customers. So that equally is important to us, of course, as it is to look at the volume of accounts that come in. As we've now entered the new year, it's been what we expected. We saw very healthy trends in the back half of last year, I think you observed not just in our revenue acceleration, but you observed a broader market. that reported that they had reported strong trends from consumer demand. We're seeing similar trends carried through into the, call it, the first quarter of the year. So it's a good year, off to a good start as we expected. Nothing unusual.

Maybe one last one. Regarding your targets for $700 million in sales by 2028, I think you've previously talked about expected breakdown between Jeuveau and Evolysse in the U.S. So maybe just talk about what we should expect for ex-U.S. contribution to that $700 million revenue target.

Serge, I will be happy to take that. So as we look at the $700 million, we expect 10% to 15% of that revenue to come from OEM, call it, in the range of $100 million. where we then have the remainder coming from both the filler franchise and the Thomson franchise in the U.S. As I noted on the call, it's a $10 billion market that we've got coverage in by the time you get out to 2028. And as David mentioned, about $1.8 billion of that market is the OUS market. So that still leaves us lots of opportunity to overperform that number. I think we've -- it's very clear that, that's the low end of our long-range guidance. And I think that comes from our confidence in the performance of our products as well as the opportunity and the size of the opportunity in these markets across geographies and across the product lines.

Thank you.

And our next question comes from Uy Ear with Mizuho Securities. Please state your question.

Hi guys thanks for taking my question and congrats on hitting non-GAAP profitability. So on the Restylane-L study, I was wondering if you guys can sort of talk a bit about maybe the differences or similarities in safety with respect either to bruising and swelling and/or any of the types of things that might have been notable. And I guess on the second question is -- could you also kind of elaborate on the market with millennials in particular for Lift? Just curious to see how that's sort of changing the -- is it sort of a similar kind of, I guess -- do they see sort of the similar kind of benefits that you see from Jeuveau because they're not -- I guess, historically, these products have sort of been using older patients. Thanks

I'll take your first question, Uy. The -- in terms of the rest of the AE profile, when you're looking at them, they're pretty similar. If anything, if I recall correctly, the -- if you look at the AE trends, actually favorable Evolysse versus the Restylane product. In terms of the swelling, again, as an AE, it was pretty similar, again, seem to favor Evolysse. In terms of swallowing post procedure, which is slightly different, one of the pieces of feedback that we've gotten very consistently is one of the reasons why they seem to like injectors like the Evolysse product is. What you correct to is what you get? In other words, you don't have to inject product and then take into consideration this product going to swell over time? Or is to have to under correct or have to correct. The comment that we're getting consistently from the investigators is just correct to your optimal correction and you're done. You don't have to take any additional swelling into consideration.

And then we, as far as the demographics that are getting injected with fillers, I think you're right. First on average, fillers overall skew a bit older than neurotoxins. Now that being said, as you go a layer deeper, consumers that are younger coming in for filler treatments in the lips. And so lips seems to be the gateway for the younger generation. And then it works its way into other areas where as you move to the cheeks, it's generally an older generation that's getting treated further up in their cheek phone. And so the answer is it varies, which is why we have a full portfolio of products just as you see the market leaders do as well so that you're treating different patient types. I think that gives us a unique opportunity. In the end, the way we look at the filler business is a little different, which is, first, -- we look at it by product, meaning we expect this lift product to be the most versatile. And just like Jeuveau is indicated in the Glabellar lines, it is often used outside of our indication and outside the Glabellar area to areas that are not approved like the forehead and the gross feet into all of the comments. The same applies with some of these fillers sellers like the Lift product, which is versatile, including the Restylane product, which is also considered a versatile filler wear. A patient may get injected in areas like lips and also the nasolabial folds and other areas. So I think there's a lot more we need to learn about how we'll position each of the brands and what that means for our consumer segmentation. But in the end, the overlap between the customers actually injecting these fillers is nearly one-to-one with our toxin users. And so it gives us an opportunity to learn with our existing customers how best to do that.

Do you foresee perhaps maybe going deeper or wider, I guess, into sort of the outside of the spas, I guess?

Yes. So our business today, to your point, of the 12,000 customers, we've said that our largest customer set is the medical spot channel followed by derms and plastics. And we believe that overall for the category in neurotoxins medical spots are the single largest group that does these. We also know derms and plastics. Tend to use, on average, a little bit more filler than medical spa do per treatment. So I do believe that this will accelerate our expansion into new customers. We have heard from customers that are thinking about working with us at the addition of the filler is a catalyst for them. And we do believe that, that's going to be another growth driver that enables Jeuveau to be more successful over time. But it starts with establishing a new filler line and the value of that filler product. To the extent that those practices see a lot of the benefits that we're seeing here in the clinical data relative to other products they may use. We believe that, that will translate over to benefits on the utilization of Jeuveau as well.

Thank you.

Thank you. And our next question comes from Douglas Tsao with H.C. Wainwright. Please state your question.

Hi, good afternoon and thanks for taking the questions and congrats on the progress. David, maybe following up on that last question, just when you think about adding the Evolysse fillers, do you think that this -- there's more opportunity for you to add new accounts or maybe talk about the opportunity to just go deeper into accounts might be using Jeuveau, but perhaps are still sort of continuing to use some of the competitor products to get access to discounts on their fillers. Thank you.

Yes. Look, I recognize the simple answer is to say one or the other. But the reality of it is we have sales reps deployed across the U.S. that cover a range of customers from our existing users that are very loyal where I hear first-hand that they would love to get Evolysse into their hands and start using the product. So we expect that our existing customers will want to have access, and they'll want to trial the product. On the other hand, as I'm out in the field, I'm talking to customers that are in some stage of considering partnering with us on Jeuveau and Evolysse and the technology itself and now the data are compelling reasons to start doing that. So I do believe in the end, it's going to be a mix. It's hard with product launches to determine which is going to be a big contributor. But look, we've been on the market for 5 years. We command 12% unit share as of the end of this year, not in significant care. And those customers partnered with us because they believe that we're a quality company that reflects their value system, and we invest in their growth. And I do believe that we're philosophically aligned with these practices in a way that they would be aligned with us as we introduce a new product to the extent as we can continue to do demonstrate that we have a high-quality differentiated filler that gives their practice unique advantages. And so with that, I do think our existing practices are excited about this. There's a lot we have to do between now and commercialization. It's exciting. I can tell you we have a team dedicated 100% to fillers, inside this company working through our commercialization strategy. It will be different. It won't be like the other products. And we believe this product has a lot of potential. And so we're looking forward to this next phase of the company. That being said, we don't expect the fillers to launch this year. And so our focus is entirely on Jeuveau in the market with practices and we believe that the growth that we've demonstrated here in our guidance reflects what we can deliver as a stand-alone single product-focused company this year.

Okay. Great. And then just as a follow-up, when you think about the filler launch, which I hear your point isn't this year, but I think Sandra talked about some incremental costs associated with it. Do you expect to increase the size of the sales force? Or when you talk about higher expenses for the launch, is that mostly just going to be around promotion and other spend.

Yes. I think we'll be in a position to provide a little more granularity as we get closer to commercialization. The reality of it is we don't anticipate a large investment in one pocket of this, meaning a significant sales force expansion. I think we have a very diverse organization, this digital footprint that we've developed makes us very efficient from an operational standpoint and allows us to maximize our reach despite the size of our field footprint. And so we're going to continue to lean heavily on our digital capabilities. I would expect there would be some marginal increase in the sales force, but we've continued to do that, as you know, every 6 to 9 months. we opportunistically add to our sales force. We've been doing that consistently now for multiple years. As a matter of fact, we did one in the back half of last year. You saw that reflected in our OpEx in the fourth quarter was the cost of expanding that -- that team just hit the field in January. So it's helping us continue to expand our footprint now not only for the Jeuveau growth, we have but in anticipation of the filler that's coming. And of course, these co-branded media and education are very important parts of the investment mix that we'll make. And those are things that we're evaluating now, how we continue to bring products to market in a way that is different from what's traditionally been done. And I think you can expect that we'll get creative in that way as we get closer to launch and share that with you.

Okay, great. Thank you.

Our next question comes from Balaji Prasad with Barclays. Please state your question.

Good morning. This is Sha [ph] on for Balaji. Thanks for taking our question. It has been two quarters even changed its pricing strategy on DAXXIFY. Have you seen any impacts on the growth uptake of Jeuveau? And how do you expect market shares to change DAXXIFY price being similar to Botox now? Thank you.

Sure. Thanks for the question. Look, I think with every new entrant, you try to establish what your value proposition is to the market. And as you pointed out, -- the latest entrant made a significant shift in their pricing strategy early on in the launch. The fourth quarter, I think, was the first full quarter that you saw that competitor in the market with new pricing, and you saw the growth that we deliver I think we said all along that the entrance of a new competitor doesn't change our focus. I think that applies not just to prior competitors and applies to new competitors coming in. And that doesn't mean that we don't take competitors seriously and we're not prepared for them, but it also means that we try to maintain our focus against the real opportunity, which is we see this as a beauty category and that consumers are looking to partner with a brand that aligns with their values. And we've built this brand from the ground up for that younger generation of millennials. Everything from our text-based loyalty program to the co-branded media to the way we advertise and communicate with practices, it is a brand that's built for this younger generation. And we believe that our success is driven by our ability to continue to execute on our vision. And it's not driven by the competitive dynamics that have played out in the market. And we've been able to prove that in the fourth quarter. We expect that to continue to be the case going forward. we don't anticipate any change to our pricing strategy, our promotional strategy or anything we do on the execution side. We're really proud of what the team has done, and we'll continue to see really strong execution from them.

Thank you.

Thank you for all your questions. At this time, I would like to turn the call back over to David Moatazedi, President and Chief Executive Officer, for closing comments. David?

Thank you. As we look out over the next 18 months, we've built the infrastructure to deliver on Evolysse's growth. The continued strength of our flagship toxin and growing brand loyalty will drive meaningful growth this year as we look to expand our share in the U.S. and increase our footprint internationally. The combination of strong execution and the expansion of our portfolio with Evolus and Estyme put us well on our way to achieving our 2028 revenue goal of at least $700 million. I'm proud of the innovative culture we've built at Evolus and the tenacity of our team. We strive to differentiate ourselves in the marketplace. We expect to outpace our competitors with a strong beauty brand, proven products, digital infrastructure and unique strategy targeting millennials, the fastest-growing segment of toxin users in the market. The increasing momentum of our business and the results of the fourth quarter and full year 2023 demonstrate the effectiveness of our business model and the competitive moat we've built as the only cash-pay focused aesthetics company. Finally, next week, we will participate in both the Leerink and Barclays Conferences in Miami. We look forward to seeing you all there. Thank you for joining us today.