ABBV - Evolus: Extra Strength Dose Data Provides Additional Offering Expansion For Jeuveau

Summary

• Evolus' Jeuveau continues to see growth. Recent release of unaudited full-year 2022 financials showed revenues reaching $148.6 million, which was an increase of 49% over same period in 2021.
• It predicts that it will reach organic net revenue of $500 million by 2028.
• Interim results released from "Extra Strength" Jeuveau study were positive; final results expected to be released in the 2nd half of 2023.
• It recently received approval of Nuceiva in Australia, with expected launch in 2nd half of 2023. Prior to launch in Australia, it is launching the drug in other European territories like Austria and Germany in the 1st half of 2023.

Evolus, Inc. ( EOLS ) is a great speculative biotech play to look into. The reason why I state that is because it has already established the ability to compete well in the facial aesthetics market. Especially, since its drug Jeuveau has done well in treating patients with glabellar frown lines.

Evolus pre-announced its Q4 and full-year 2022 earnings and exceeded Wall Street expectations. It hopes to expand its market presence in the United States in the coming years, along with expansion into European territories such as Australia. Its growth has been good despite the competition it has faced in the aesthetics space.

However, there is another reason why I believe it is good to look at this biotech. It is because of its ability to capture an additional chunk of the market by fending off competitors. It hopes to accomplish this with its ongoing phase 2 study using an "Extra Strength" dose of Jeuveau for treating patients with glabellar frown lines. Interim results were released which were positive and final results from this study are expected to be released in the 2nd half of 2023. This may give Evolus a boost over BOTOX from AbbVie ( ABBV ) and DAXXIFY from Revance Therapeutics ( RVNC ). With revenues expected to grow sharply in the United States, plus the expansion towards other European territories such as Australia, these are the reasons why I believe it is a great speculative biotech play to look into.

Jeuveau For The Treatment Of Patients With Moderate To Severe Glabellar Frown Lines

The main drug in the pipeline is Jeuveau, which has been approved for the treatment of adult patients with moderate to severe glabellar lines (wrinkles between the eyebrows). This wrinkle treatment drug from Evolus was approved by the FDA back in 2019 . More importantly, its growth trajectory continues to increase as it continues to do well in the face of stiff competition. The reason for FDA approval of Jeuveau was because of two phase 3 trials, whereby a total of 654 adult patients were shown to have seen an improvement in glabellar lines. One phase 3 study (Trial 1) and then another phase 3 study known as (Trial 2) . Both of these studies are what helped the company to eventually receive FDA approval of Jeuveau.

However, it is first important to look at the studies which helped it to receive FDA approval of this drug. It was the two phase 3 studies shown above, known as Trial 1 and Trial 2. It was shown that Jeuveau was able to achieve the primary endpoint in both of these cases. The primary endpoint was reduction of the severity of glabellar lines, defined as a 2-point composite improvement agreed upon by physician and patient at day 30.

Evolus' drug was able to beat out placebo in both of these studies, whereby reduction of glabellar lines primary endpoint was 67.5% of patients in Trial 1 and then 70.4% of patients in Trial 2. This, compared to placebo achieving only 1.2% and 1.3% in each of these studies respectively. As I highlighted above, these were the main reasons for approval and beating out placebo wasn't a real challenge.

On the other hand, Evolus is in great shape to go against BOTOX and possibly DAXXIFY with the use of Jeuveau. That's because it may offer patients with a longer-duration treatment option. Especially if Evolus can eventually get label expansion to include the "Extra Strength" dose of this drug.

Expansion Opportunity Potential With High Dose Data

The biotech will continue to expand to other territories to increase its revenues, but despite competition in this aesthetics treatment market space, there is something in particular that you should look out for. That is, the opportunity for Evolus to increase patients to the "Extra Strength" dose of Jeuveau. What do I mean by this? As I briefly stated in the beginning above, it is running a phase 2 study using "Extra Strength" Jeuveau for the treatment of adults with glabellar frown lines. This could provide customers with the first of its kind multi-strength neurotoxin option. A consumer may or may not want a longer-duration wrinkle treatment, but the point remains that such an option holds potential for the biotech to steal or capture market share from AbbVie and Revance Therapeutics. This phase 2 study is using three treatment arms and they are as follows:

• 20U BOTOX
• 20U Jeuveau (current original strength dose FDA approved)
• 40U Jeuveau (Extra Strength dose).

As you can see above, the goal was to see if the extra strength dose could give patients another option. It was shown that the Extra Strength 40U formulation achieved a one-point improvement on the Glabellar Lines Scale with the duration of the effect lasting 26 weeks. Thus, the goal of giving a new treatment option for these patients, being achieved. This mid-stage trial is expected to complete in mid-2023 and final results from it are going to be released in the 2nd half of 2023. I believe that if Evolus can give patients an additional treatment option with this Extra Strength Jeuveau, it may sway patients to move away from the other available Botulinum toxins on the market.

Financials

According to the 10-Q SEC Filing , Evolus had cash and cash equivalents of $65.6 million as of September 30, 2022. It still believes that it has enough cash to reach breakeven. What that means is that it is developing cash based on sales of Jeuveau. If things continue to go well in terms of sales this drug, then it will be in great financial shape. That is what is great about this company, in that it already generates sales of an approved treatment. It did pretty well in its most recent Q3 2022 earning report. It stated that it generated total net revenues of $33.9 million. This may seem low, but when you compare it to the year prior, this is actually good. In the year prior (Q3 of 2021) it only generated $26.7 million in sales. This ends up being a year-over-year increase of 27%.

It has several campaigns it hopes will switch over patients, especially the "Switch Your Tox" program. The truth is that a product like this needs customers to come back. Evolus is doing quite well in this regard, when you look at the most recent metrics. In Q3 of 2022, it added 650 new customer accounts, which brought the total customer base to 8,800 purchasing customers. Sounds good right? It does, but even better than this is that the reorder rate remained steady above 70%. This is an important rate, because it indicates that customers are continuing to buy this particular facial aesthetics product.

Conclusion

The final conclusion is that Evolus stock is a great speculative biotech to look into. That's because it has already proven to do well in the face of competition in the wrinkle treatment market space. I proved this point with the earnings report from the biotech which was released for Q3 of 2022. Not only that, but the company yet again highlighted its growth potential with the pre-release of unaudited financials a few weeks ago .

It noted that Q4 of 2022 unaudited net revenue reached $43.6 million, which was a 26% increase from the year prior. When looking at full-year 2022 unaudited net revenue, it reached $148.6 million, which was an increase of 49% over the same time period in 2021. Analysts from SVB Leerink believe that there is room for it grow revenue and capture up to $2 billion of the U.S. aesthetics market . It has seen impressive growth thus far and it is expected to get even better in the coming years. Evolus is predicting that 2023 net revenue is expected to reach between $180 to $190 million, which is much higher than that which was achieved in 2022.

With proving itself in the market place against other competitors, plus being able to generate double-digit growth along the way with Jeuveau, Evolus predicts that it will reach organic net revenue of $500 million by 2028. I believe that this company has a good shot at reaching this goal, especially since it has been expanding to other markets. Matter of fact, it recently received approval of Nuceiva (Jeuveau) in Australia and the expected launch is set for the 2nd half of 2023.

But before this, it expects to launch the drug in other European territories such as Germany and Austria in the 1st half of 2023. What was achieved in the "Extra Strength" dose study was also significant and provides another option for patients who want to remain with Jeuveau treatment. That is, patients will now have a longer-duration treatment option should they choose to use it.

Based on its expected growth over the years, plus the "Extra Strength" dose potentially becoming a second option, these are the reasons why I believe that Evolus is a great speculative biotech play to look into.

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