Evolus Inc. (Nasdaq: EOLS) surprised the market after the Newport Beach-based aesthetics company reported its first-ever operating profit, two quarters ahead of schedule.
Evolus is the maker of Jeuveau, a product that competes with larger rival Abbvie Inc.’s Allergan, maker of the popular Botox. On July 31, Evolus posted second-quarter results that exceeded analyst expectations.
“We’ve been the fastest growing brand now for three consecutive years, so it has just been an excellent execution across the board that applies also to our international business,” Chief Executive David Moatazedi told the Business Journal.
The company, which went public in 2018, over the years has survived lawsuits from rival Allergan, suffered job cuts and faced plenty of doubts on Wall Street, where at one point it almost touched $40 a share.
The company reported it had an operating income of $1.1 million when analysts projected a $2.6 million loss.
Sales increased 36% to $66.9 million, above the $65.8 million expected by analysts. The growth led the company to boost its full-year revenue outlook to $260 million to $270 million, up $5 million from the previous forecast and above the analyst estimate of $263 million.
Evolus also reaffirmed that it’s still on track to triple revenue to $700 million by 2028, with an annual growth rate of 28% from 2023, driven by the market opportunity for Jeuveau and the commercialization of two new hyaluronic acid based dermal fillers.
Shares in Evolus rose 13% after announcing the results; at press time, the shares traded around $13.05 each with an $816.4 million market cap.
Younger Clients
Orange County’s medical aesthetics industry is benefiting from the younger generation, Moatazedi said.
Millennials represent a majority of the users in Evolus’ consumer loyalty program and is growing at a “fast clip,” according to Moatazedi. He said neurotoxin injections are becoming a part of their everyday beauty regimen with appointments taking up to 20 minutes, quicker than other beauty treatments.
One session on average costs between $300 to $500 and is typically done two to three times a year.
Part of its popularity comes from Evolus’ differentiated purification process that results in a more “precise effect,” Moatazedi said.
“We’re the only two brands that have that molecule commercially available, but it’s an entirely new manufacturing process that results in that precision difference with the product,” he said.
Evolus currently has 300 employees and plans to expand based on this expected increased demand.
It leased the floor above its current space at its Newport Beach building to create additional space for more employees.
The company posted several job listings not just in Newport but also worldwide with the recent launch of Nuceiva in Spain and Australia. The product, which aims to smooth frown lines between eyebrows, was developed by South Korean pharmaceutical manufacturer Daewoong.
“We’ve been hiring actively in both of those markets where we’ll have a direct presence,” Moatazedi said.
Expanding Portfolio
Moatazedi knows Allergan well, having held senior marketing roles at that firm for more than a decade, including SVP of medical aesthetics, before joining Evolus in 2018.
Evolus Chief Financial Officer Sandra Beaver in May was honored by the Business Journal at the 17th annual CFO of the Year Awards, in the public company category.
“We certainly will scale,” Beaver told the Business Journal at that time. “Fillers are incredibly synergistic” with Jeuveau.
Evolus is preparing for the product launch of its Evolysse Lift and Smooth dermal fillers.
It’s said to be the first hyaluronic acid developed under freezing cold temperatures, resulting in different properties that were found to outperform rival product Restylane after six months in a clinical trial, Evolus said. The positive results from the trial were presented at this year’s SCALE aesthetic medicine and dermatology convention on May 17 in Nashville, Tennessee.
The company filed with the Food and Drug Administration “months earlier than expected” and anticipates launching in the second half of next year after receiving approval.
Evolus last year announced it has agreed to partner with French private company Symatese Aesthetics to create a line of five dermal fillers. The remaining three products will begin distribution in 2026 and 2027, according to regulatory filings.
The Evolysse fillers are meant to be a complimentary procedure to Jeuveau.
Jeuveau is currently available in 14,000 clinics with 98% offering both toxins and fillers, according to Moatazedi.
He said 40% of customers that do toxin injection treatments will add on a filler.
“That’s a sizeable number of consumers that we can target right out of the gate with Evolysse,” Moatazedi said.
