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Evolus: ‘Not Your Mother’s Botox’

Evolus Inc. Chief Executive David Moatazedi believes he has the correct product—and marketing pitch—to win over millennials and take on Allergan PLC’s famed Botox for aesthetics uses.

Evolus’ lead product is Jeuveau, which rhymes with hello and comes from the French word “nouveau” that means modern or up to date.

There’s a reason for the branding.

“This is not your mother’s Botox. This is a fresh new product; it’s got youthful energy,” Moatazedi told the Business Journal during an hour-long interview in late January.

“Botox can’t spend enough to create a perception with millennials that will overcome what exists in the back of their minds around this old product,” he added.

“Toxin is in the name. The name Jeuveau is so benign—it’s a beauty name.”

Irvine Track Record

Moatazedi, 42, knows Allergan well, having worked there 13 years. He rose to senior vice president of U.S. Medical Aesthetics, where he led brands like Botox and Juvederm and oversaw acquisitions such as LifeCell for $2.9 billion and Zeltiqu Aesthetics for $2.5 billion.

Two years ago, he jumped to Evolus (Nasdaq: EOLS), where last summer he oversaw the launch of Jeuveau.

Wall Street is expecting sales at the Newport Beach-based company to explode threefold this year to $105 million, the average estimate of 10 analysts who cover the company.

“You see the opportunities and presume what they will be, versus what everyone thinks they will be,” Moatazedi said. “That’s what I saw in Evolus.”

Getting investors to grasp the opportunity has been a challenge; Evolus’ stock has seen some of the largest swings of any Orange County public company over the past two years.

After it went public at $12 in early 2018, shares of Evolus topped $34 over the course of the year. Since then, the company’s stock has fallen to around $10 and a $340 million market cap.

The drops came as some early investors sold their holdings, and the company issued more stock to raise cash.

The company’s shares even fell on Jan. 9 when it announced preliminary fourth-quarter revenue of $18.5 million to $19.5 million, topping the analysts’ expectation for $16.2 million.

A big reason for the skepticism is that investors are watching a lawsuit over the originality of Jeuveau, said Moatazedi, who expects an outcome by October. Evolus’ South Korean supplier of Jeuveau is being sued by a rival that provides a botulinum toxin strain to Allergan.

Evolus’ shares rose 3.8% to $10.20 on Jan. 27 after the company announced the publication of a Phase 3 study that showed “no serious adverse events” as a result of using its toxin for crow’s feet, a type of wrinkling around the eyes.

Jeuveau is now used to treat moderate to severe frown lines between the eyebrows.

Teenage Boss

Moatazedi grew up in Laguna Niguel as the son of an entrepreneurial family that owned a marble and granite firm with about 25 employees who did everything from fabrication to installation.

One summer, Moatazedi ran the company while his father was on an extended trip. He even fired an employee who didn’t show up for work.

“I have found there are windows of time when you’re under heavy stress or you’re exposed to something entirely new and that’s where a combination of aptitude and focus—you can pick up big leaps of learning in life.”

While earning his chemistry degree from California State University-Long Beach, he interned at Allergan where he did clerical tasks such as making copies and scanning documents.

“But then like anything else, you work hard, ask a lot of questions, you’re interested—and before you know it—I’m sitting in a sales training class and they’re like ‘we want you to go through the full two-week sales training course like new hires do’ so you can learn how the business works.”

However, Moatazedi took a different path with a job at Novartis Pharmaceuticals. As a drug representative in Palm Springs, he helped push that unit from the bottom rung to a No. 2 ranking nationally, he said. He even met the CEO, who advised Moatazedi to get into market research, which he eventually learned.

By 2005, he was recruited to Allergan.

When Allergan acquired Santa Barbara-based Inamed for $3.2 billion, its dermal filler product called Juvederm had low expectations for success. Other managers rejected the role and Moatazedi said he was “the fourth option.”

“I saw it as an incredible opportunity to launch a product,” he recalled. “That brand did over $100 million in its first year and it was seen as the largest product launch in aesthetics at that time.

“I always had this mindset that it wasn’t about the role you held, but how you make an outsized impact in any position you take,” he recalled. “Every time I took a role, I talked with folks. I said what would be outstanding to come out of this group or out of this function? I always gravitated to roles I thought that I could add more value [to].”

Aesthetics Industry

Aesthetics is a $12 billion a year industry that is growing at “double digits” pace, he said. Allergan sold about $3.2 billion worth of Botox in 2017, an amount that could rise to $4.6 billion by 2024, according to market researcher Statista.

Allergan, which is being purchased by AbbVie Inc. (NYSE: ABBV), last month announced Carrie Strom will head its worldwide aesthetics unit that will be based in Irvine. Strom, who used to work for Moatazedi, “is very bright and incredibly capable,” he said.

Moatazedi said his company is different than Allergan in ways such as targeting a younger demographic, doing co-promotions with medical clinics and using its web platform to reduce overhead on smaller accounts.

“I see what this will be. We know where we are headed.

“We just need to get the best talent, be well capitalized and execute.”

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