Q2 2023 Evolus Inc Earnings Call
Greetings and welcome to <unk> second quarter 2023 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this call.
Is being recorded.
I'd now like to turn the conference over to your host Mr. David Erickson, Vice President of Investor Relations.
Thank you operator, and welcome to everyone joining us on today's call with me today are David Motors, heavy President and Chief Executive Officer, really Avalon, Chief Medical Officer, and head of R&D, and Sandra Beaver Chief Financial Officer.
Our prepared remarks today will include forward looking statements within the meaning of United States Securities Laws and management May make 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 business strategy operations or financial performance, 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 Form 10-Q and <unk>.
Current reports on form 8-K.
Actual results may differ materially from those expressed in or implied by the forward looking statements. The company undertakes no obligation to update or review any estimate projection or forward looking statement.
Additionally, todays 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.
<unk> website at <unk> Dot com.
Following the conclusion of today's call a replay will be available on our website at <unk> dot com and with that I'll turn the call over to David.
Thank you David.
We're pleased to report another quarter of continued above market sales growth that reflected record sales and accelerating growth over the first quarter.
In the second quarter, we achieved all time highs across several leading indicators, including expansion of new accounts and increased consumer usage of your Boe through our ambulatory rewards consumer loyalty program.
On top of an above market Q1 second quarter growth accelerated by 10 points.
And an increase of one full share point for you both in the front half of the year exceeding our internal goal by already achieving our full year share target.
The combination of continued strength in execution and increasing momentum.
US the confidence to raise our 2023 sales guidance to between 185 and $195 million.
This updated guidance equates to over 30% growth at the upper end of our range and is more than triple the estimated category growth rate.
While we continue to concentrate on strong execution, we remain focused on our 2028 sales goal of $700 million.
Driven by the continued expansion of <unk> in the U S. The international expansion of receiver and the introduction of our beliefs.
Yeah.
Moving now to lease we are rapidly advancing the clinical program to support the regulatory approval for the first two abilene filler products in 2025.
We expect to complete our FDA filing in approximately 12 months. Additionally.
Additionally, we recently completed our phase II extra strength study for Hugo and look forward to the presentation of those results in the fourth quarter.
From an operating standpoint, we continued to exercise disciplined operating expense management and remain committed to reaching sustained profitability.
Our operating leverage as evidenced by our 28% increase in top line and the front half of the year, which was nearly double the rate of non-GAAP operating expense growth.
This is a continued trend of increasing operating leverage.
Overall <unk> is delivering on our goals for growth and operating performance as we advance our mission to become a global multi product aesthetics company.
Now I'll get into some of the details.
Second quarter sales grew 33% year over year as broader adoption or as you.
Continue to drive market share gains are above market performance is evidence of both our accelerating momentum and a resilient U S toxin market.
Our key performance indicators continue to reflect increased market penetration.
During the second quarter, we added nearly 800, new accounts, bringing our total customer count to approximately 11000.
This record number of new accounts validates the compelling value that our unique business model offers to both new customers and existing clients, who are purchasing greater quantities of <unk>, enabling access to additional loyalty program benefits. These benefits include co branded media opportunities targeted to the younger generation.
Such as streaming TV billboards and digital advertising.
We expect to continue adding new customers at a robust pace pace in 2023 and beyond as we penetrate more deeply into the total U S market up 30000 accounts.
Oh, no Giovanni has only penetrated about one third of the account base currently operating neurotoxin.
The durability.
<unk> can be measured by consumer activity through our consumer loyalty program.
There are two key metrics, we view is predictive of future growth.
The first is new members, who enroll in our program and the second is the total number of consumers, which includes a combination of new and existing members.
In this quarter, we added 64000, new members to our Atlas rewards consumer loyalty program, bringing our total as you've all user base and the program to 638000.
Enrollment in our Tech space Atlas rewards program is simple for members once enrolled members receive $40 off each about treatment. This drive these members back into the practice more frequently, allowing our customers to cross sell additional treatment.
Importantly, the majority of new to talk to members in our rewards program are millennials or younger which is a highly desirable demographic that will represent the majority of users in the category over the next several years.
Total showboat treatments and our loyalty program exceeded 147000, and all time quarterly high as existing members continue to return for repeat treatments of Hugo demonstrating sustained brand loyalty.
During the quarter, we reached an important milestone by completing the one millionth treatment in this program since launching it three years ago.
Turning to our international operations, we are now commercial with the receiver five major countries.
We are continuing to build momentum in Great Britain, Germany, and Austria and are excited to have recently initiated the launch of new CEVA in Italy, the fourth largest aesthetic neurotoxin market and a $500 million of European region.
Europe remains an important part of our overall growth strategy, representing an estimated seeing high single digit millions in sales in 2023.
Longer term, we continue to expect total international sales to represent 10% to 15% of our 2028 revenue target of $700 million now I'll turn it over to Roy for product development update Thank you David.
I'd like to provide you with an update on our five new sellers currently in late stages of development.
The <unk> product line.
There's a broad spectrum of indications, including mid.
<unk> faced volume restoration nasal labial folds lead volume and an eye product to address the house under the IDE that can lead to those dark circles.
This is a next generation filler line, one that utilizes <unk> core technology.
As mentioned on the last call our partner <unk> and developed our first in class manufacturing process that helps to preserve the natural complex of the hyaluronic acid molecule.
This is key to creating a gel that is dynamic trend sharp moves naturally with tissue and able to withstand repeated shear and stress collapsed over time.
The first two products slowed in left are currently undergoing clinical investigations.
140 patients were enrolled at six clinical sites there.
The study is one year long end users wrestling al as the active control.
It's a non inferiority design and it looks at the change from the baseline using a validated nasal labor fault scale compared to restaurant al at six months after treatment.
The one year follow up ends in Q4 this year.
Then patients will receive a repeat treatment we continue to be on track for approval of these two products in 2025.
This study for the third product are made faced cheek volume rising filler sculpt is a longer trial.
308 patients were enrolled at 11 sites. This study is two years in duration and users restaurant lift as the active control.
This is also a non February design with the primary endpoint at six months comparing <unk> to the active control.
We expect the last patient to complete the study in 2025, leading to an approval in 2026.
Regarding the lift seller, we plan to submit the IDE E. In Q4 of this year followed by the <unk> product in Q1 of 2024 and expect to have the approval for both products. In 2027, we will provide further details about these trials in the near future.
The two initial products smooth and lift will be the most versatile and we expect will represent the largest volume.
The next product sculpt used for the mid face volume represents the premium priced filler segment, the lip and eye products address of our specialized market segments.
This is a complete portfolio positioned to be highly competitive in this growing market.
Turning to our extra strength of our program.
During the quarter, we completed our phase II clinical study the interim data provided halfway through the study demonstrated 26 weeks or six months of duration across various parameters as we followed patients back to their baseline after being treated we look forward to having the final data set presented.
In the fourth quarter of this year.
We continue to receive positive feedback from customers, who are interested in combining the unique precision profile of Chicago with the option of a longer duration formulation.
This in combination with our final extra strength data and the input from advisory boards will help guide us with respect to our next steps with this program.
With that I'll hand, it back to David.
We remain very excited about the differentiation of the Abilene portfolio and its potential to become one of the leading HLA pillars in the U S. 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 launches.
Innovative new technology, alongside our flagship <unk>.
We continue to believe the combination of a highly competitive filler line and our growing customer base provides a unique opportunity to build a durable brand that adds tremendous value to analysts and our shareholders.
Now I'll turn it over to Sandra who will cover the financials. Thank you David.
I would like to Echo David's earlier comment and congratulate the Evelyn team for another quarter of above market overall performance, including record highs in sales in our key metric and for their continued focus on operating expense and cash management.
Turning to the results global.
Global net revenues for the second quarter were $49 3 million up 33% compared to net revenue in the second quarter of 2022 with U S sale comprising more than 95% of the total.
Once again U S sales this quarter were driven primarily by higher volume and.
Pricing in the U S remains strong overall and our average selling price in 2023 is running in line with the same period last year, while our customer reorder rate continues to track above 70%.
Our reported gross margin for the second quarter was 68, 7% and our adjusted gross margin, which excludes the amortization of intangible with 72% and in line with our guidance.
Our GAAP operating expenses for the second quarter were $64 5 million compared to $53 8 million in the first quarter.
non-GAAP operating expenses for the second quarter were $42 7 million, which included a $4 4 million milestone payment related to our new U S pillar license.
Excluding net non-GAAP operating expenses were $38 3 million compared to $35 5 million in the sequential quarter.
This represents an 8% increase in non-GAAP operating expenses, while revenue increased 18% compared to Q1.
As a reminder, non-GAAP operating expenses exclude product cost of sales.
Reported selling general and administrative expenses for the second quarter were $41 2 million compared to $37 4 million recorded in the first quarter with the increase mainly attributable to higher commercial cost.
This quarter SG&A expenses included $4 million of noncash stock based compensation compared to $3 3 million in the first quarter.
As I mentioned this quarter, we recorded a $4 4 million expense related to the first milestone payments to <unk>.
As a reminder, our next milestone payment of $1 6 million Euro is not due until 2025. After the planned launch of our first <unk> product.
Our non-GAAP loss from operations in the second quarter was <unk> 8 million compared to $5 9 million reported in the first quarter.
non-GAAP loss from operations. This quarter includes the $4 4 million license milestone expense.
Net of license expenses non-GAAP operating loss declined $2 3 million as compared to Q1, and $10 5 million as compared to Q2 2022.
Continuing our trend towards profitability and consistent with our initial 2023 guidance. We continue to expect to achieve non-GAAP operating profitability in the fourth quarter, excluding our investments related to Emily.
Both non-GAAP operating expenses and non-GAAP loss from operations excludes stock based compensation expense revaluation of the contingent royalty obligation.
And depreciation and amortization amortization.
To further elaborate on the investment related to the U S seller as previously announced we will fully fund the filler launch costs, which takes the combined business to sustained profitability in 2025 by drawing on the available $50 million tranche of debt from Pharmacon with $25 million in Q2 and.
<unk> $25 million in Q4 of this year.
Last quarter, we raised our 2023 operating expense guidance by $8 million solely to account for the addition of filler launch costs, including the upfront for $4 million milestone payment.
Net of this $8 million in 2023, and an estimated $50 million in interest expense.
<unk> $27 million available to be invested until the pillar is profitable.
Investment will be concentrated over the back half of 2024 and the front half of 2025.
Considering the high leverage we achieved on our existing infrastructure launching the filler line is highly synergistic, which gives us the confidence this additional $50 million fully funds the launch with sustained profitability on the toxin achieved this year. We're confident that we are fully funded to sustained profitability on the combine.
<unk> filler and toxin businesses.
Turning to the balance sheet.
We ended the second quarter with $41 7 million in cash compared to 31 5 million on March 31 2023.
The sequentially higher balance included the drawdown of $25 million from our Pharmacon credit facility.
In the second quarter net cash used for operating activities was $13 3 million, which included the $4 $4 million milestone payment.
Net cash used in the second quarter of 2023 declined sequentially as compared to the first quarter of 2023, representing our continued progress towards cash flow breakeven.
Before I turn it back over to David I would like to summarize our 2023 guidance.
Based on our strong year to date performance and confidence in the resilient toxin market. We now expect total net revenues for the full year of $185 million to $195 million.
As a reminder, the third quarter is typically our seasonally lowest of the year.
And adjusted gross margin in the range of 68% to 71% unchanged from last quarter.
Full year 2023, non-GAAP operating expenses between 153, and 158 million also unchanged from last quarter.
Other modeling assumptions for 2023 include quarterly interest expense of $3 5 million and full year weighted average shares outstanding of approximately $57 million.
Looking beyond 2023, we continue to target total revenue of $700 million in 2028, driven by continued growth and share gains in our neurotoxin franchise in the U S and international market, along with a growing contribution from our <unk> line of fillers that begins in 2025.
This equates to a compounded annual growth rate of 29% on a total addressable market that is 70% greater with the addition of a pillar product line back.
David Thank you Sandra.
The results of the second quarter clearly demonstrate the continued above market progress. The <unk> team is achieving in the execution of our long term growth strategy with record quarterly revenue and all time highs in our key metrics, we continue to build momentum outpacing both the underlying growth of our markets as well as the competition.
As we mentioned we believe that we gained another point in market share year to date, bringing us to 11% market share of the toxin market in just two years since the relaunch of <unk>.
While we are very excited about the continued momentum in our toxin business, we know that adding the filler lines will expand our total addressable market by 70% driving us towards $700 million of revenue by 2028, a 29% CAGR on the top line.
But I don't want to mention that abolition will be participating in three upcoming investor conferences versus Kenacort Genuity as growth conference on August 9th in Boston, The Ht Wainwright Global investment Conference on September 12th in New York and cancer of Global Health Care Conference on September 26 also in New York, We <unk>.
Invite interested investors to reach out to us or to their salesperson at these banks to schedule a meeting with our leadership team with that we're ready to take questions.
Thank you at this time will be conducting a question and answer session. If you'd like to ask you. A question. Please press star one on your telephone keypad.
Confirmation till indicate your line is in the question queue, you may print star too if you'd like to remove your question from the Q4 participants using speaker equipment, they may be necessary to pick up your handset before pressing this darkies one moment, please while we pulled for questions.
My first question is from Mark Goodman with Lorraine. Please proceed with your question.
You think so I'm taking a question. This is rudy on the line for a month Oh. Congrats on this drum quote or I just have a question regarding the monkey dynamics I think you mentioned that he already reached over 10% monkeys <unk> per line will color.
The monkey dynamics, given that U S. Tocsin monkey decline single D J seemed to <unk> and.
<unk> third quarter. Thanks.
[noise] Hi, Rudy Ah. This is David Thanks for the question on the market.
You know just stomach back overall the market continues to be strong we see whether it's conversations with our account base or the data, we're seeing with an a R.
<unk> is it the talk to market continues to grow at a healthy clip now we recognize your reconciling different reports that are going to be published from the different manufacturers and ultimately have to triangulate to what your growth assumptions are but I think they all point to a market that continues to be favorable through the front half of the year and I'll also point to the fact that we're coming.
Are they back half of the year that will wrap around on a relatively depressed base. So we do expect the back half of the year to also be very strong if not pick up a tick from what we've seen in the front half.
But it is very helpful <unk>.
Next question our.
Our next question comes from Annabel Sammy with Stifel. Please proceed with your question.
Hi, My questions were kind of along the lines of that.
I guess, we used to use <unk>.
Somewhat of a proxy for market grants given they're the largest player.
Certainly seemed to be uhm backing that trend so I I guess.
Yeah, clearly you're grabbing market share your not 11%, but can you give us a little bit more color of some of the market share that you're experiencing within the practices that you.
Have partnered with or are are with them in your <unk> program and how that might look I think the 11% that you're talking about is for the broader market. So maybe you can just give us a little color.
There.
And then I'll have some follow ons. Thanks.
Annabel Thanks for the question on growth.
It is marketed OA challenging within a quarter to tease out exactly what's taking place I can tell you first anecdotally and conversations with large medical spas that are chains or individual practices I consistently hear that practices are growing of course, they're not growing at the post pandemic right that we saw that was the signal.
Bill, but we're back to growth rates are in line with where they were prior to the pandemic and that's pretty consistent that we're seeing geographically across the country and as we stratify our customer base. This quarter. The majority of our growth came from our existing customers and we see the larger customers as well as a smaller ones are.
Continuing to grow at a healthy clip and when you step back right. This is a 3% to 500 dollar procedure for the consumer it's very affordable visit the gateway procedure in the category and once consumers get into the space that continue using the product and we've demonstrated that in our consumer loyalty program as well, where we're seeing redemptions of existing page.
Asian, hitting an all time high so all metrics continue to point very favorably in this market and we feel very confident in the strength of that continued growth.
Okay, and any any sense of assurance within the practices itself.
Sounds like you're partnered with yeah.
As you pointed out clearly we are gaining market share and the toxin category with the growth that we had a year to date not just in this quarter and as you saw last year, we continued to pick up sure as well were last year. We grew at a very healthy clip also with with about 50 per cent growth. So we continue to see.
C a very favorable trend where existing customers are willing to commit more of their business to chabot as they gain confidence with our branch and they participate in the benefits of our advertising, which is a key driver, especially when they're looking for growth that younger generation is the growth driver.
Advertising is targeted to that younger generation and the more they invest with us the more we invest back into that advertising in that benefit continues to build as you move up or <unk> tears for our customers that purchase more and so we're seeing the benefits of.
Both the fields confidence and selling the product and customer engagement with the company is a very different go to market strategy that we've designed because we're cafe focus in the market starting to take notice of that we're seeing it reflected in the uptake.
Okay, Great and I guess, maybe switching tacks, a little bit on that.
Extra strength. So you know I know you want to consult with your scientific Advisory Board on next steps after the full data come out.
Is there any direction that you're leaning in I mean, we've done our own channel checks and it seems like the injector population isn't particularly hesitant hesitant to use or a reconstituted to drive off label to get extra strength, so any directions that you're leaning and at this point.
Mmm, Thanks, Annabel, you're absolutely right that's exactly what we're seeing with the presentation of the data really the two things that people are pointing to is published the data put it into the public domain and remember these files are already commercially available.
So they're basically saying just finish the datasets show it to us.
Publish it and we will take it from there and then there was another group that basically says you should consider doing head to head, but really no no one's really pushing towards taking this to full of registration.
Okay, great. Thank you so much.
Our next question comes from Knob and tie with BNP. Please proceed with your question.
Hi, Thanks for taking my question can you, let us know.
Drivers for two three <unk> stronger accident relation.
Two one and also on market chairs.
We'll talk to Mark his show was steady in the corner.
So did <unk> from other.
Players.
And have you seen any trend of consumers switching to.
<unk> <unk>. Thank you.
Nevada, Thanks, Thanks for the questions.
Let me start with sure since launch the large majority of our share has been coming from Botox and when you speak with customers. It's intuitive we have the only other 900 kilo dolphin molecule on the market. We believe that scientifically that is the gold standard and as accounts being.
Experience with our brand they're learning about the unique precision profile, which offers a unique advantage when you're injecting neurotoxin. So naturally we continue to believe that as we gain share not just in this quarter, but going forward. It will continue to come from the market leader as it relates to how we think about the back half of the year.
Rather than comment on each quarter I think it's fair to represented as the back half of the year has some favorable dynamics to it you are coming up on a depressed base from the back half of last year that will wrap around from and you have a front half of the year, where we've from our standpoint, we've exited with some significant.
Tailwinds, we've obviously had a very strong performance that accelerated from the first date of the second quarter, and we think that that the combination with the continued strength of the market creates.
Creates a lot of momentum for us in the back half of the year on top of that we continue to see very nice growth internationally. As you know we've only been in the international markets in Europe for just three quarters now and so we're seeing very good.
In the early days and that is really pointed out the extra strength data is a topic that gets reviewed at all major medical meetings and understanding that relationship between dose and longevity is an important one in our phase two final results are going to be an important dataset confirmed the relationship between dose and duray.
Asian, and then lastly, what we didn't anticipate with the announcement of Emily was the amount of excitement we're getting from customers that we had been engaged with before that were always asking what we would be adding to our portfolio knack that this really is a novel technology. It's one that through the advisory board meetings, we've had in the second quarter.
And in speaking with investigators, there's a tremendous amount of excitement around this product and I think the combination of those things because there's a lot of confidence that the back half of the year is going to be a great great back half horse.
Mmk and I'm actually on the international launch do you have any key learning from.
<unk> I know, it's going to be sent and also your other nausea, and you're up so fast.
The team is doing a really nice job in in the key metrics executing against them clearly it comes down to the product, which we understand the product very well from the U S. We've taken those learning a number of those key opinion leaders and we've engaged key opinion leaders in Europe that with you.
Used as we've introduced a product in new markets, like Germany, and Austria, and now most recently in Italy and the <unk>.
We invest in education, we do see greater confidence and better uptake, resulting from that so we continue to replicate that model as we bring the product into new markets.
And we establish a new company and a new brand in the space. So we're pleased with the uptake we're seeing in the market that we've entered thus far.
Thank you.
Our next question comes some Louise Chen with Cantor Fitzgerald. Please proceed with your question.
Hi, congratulations on all the progress of this quarter and thank you for taking my questions. So I think I'm first of all I want to ask you about what's your facial Sylar line. It looks like you have some opportunities where you might be first to market here, where I don't see any other additional competition. So for example from the ice perspective I was just curious if maybe you could lay that offer.
T D D at that seem really unique in any other of these opportunities that you mentioned in here, where you might be first to market or when you have a real competitive advantage and then secondly on the $700 million you know where are the potential upsides to that and then also if there's any way you could break out what you put in there I know that you said, 10% to 15% as in.
International sounds, but how do you think of all your other products that are grouped in there. Thank you very much.
Some great questions and let me start with the Applebee's Ah Ah as you know we did significant intelligence on fillers around the globe before we reached an agreement with cemeteries on on Emily and we felt very confident that we have a differentiated technology, both scientifically and in the initial clinical data that we had seen.
<unk> from Europe that will share in the coming future. What we didn't expect as we've done. These ads boards is how differentiated it is and the clinicians hands in the trials. What we're learning is is the product does play out the science plays out politically in these attribute and we do expect it to be a first in class.
Technology no other how ironic acid is manufactured through this cold technology and it does yield a different type of product that the market hasn't seen in this product is not available anywhere else around the globe today and that is unique because generally in this market their products that have been available for many years in Europe and those products.
Migrate then into the U S do clinical trials. So we have a unique opportunity here to introduce a first in class acknowledged and introduce it into a market in the U S, which is the largest market around the globe, which hasn't been done before where it enters this market before it enters other so we're very excited about that then just add there is another product that's a <unk>.
Moved in that tier trough area right now, but just to build on David side. It's interesting. If you go to conferences and listen to clinicians speak to this area, it's still an an unmet.
Kind of place where they have a good solution you can get good results at the beginning but typically these jobs tend to swell and create complications.
The iconic here was built with the end goal in mind and what they did was they created a balance whereby this gel will exert a certain amount of pressure out in order to lift in that career trough area, but yet being able to restrain itself. So it doesn't continue to swell, which is where a lot of folks get.
[noise] into trouble with the current jail. So it's a difficult area to treat which is why I say it was a specialized market and we're pretty excited about this product because again. It was purpose built for an indication to match a tissue interface. So in that sense, where we think we have quite a unique product.
I believe this is Sandra may I take your question as it relates to our 700 million mom trains guidance.
So the 700 million as David said in his script.
Roughly 10% to 15% of that revenue to come from Internationalize, you know our international market is strictly in a new C that product the talks and only so probably $75 million to $100 million of that number is going to come from new Steve outside of the U S and I think it's elaborated on our front line plan associated with that product and are very comfortable that we're well on track to make.
[noise] that number.
<unk> 600 million comes from the U S and just to give you a sense of you know I'd be French and our market thighs increased by 70% by adding a scalar products of the portfolio. So we're gonna be looking at a 7 billion dollar you asked addressable market, you know give or take and we're expecting a false market grow healthily over the next five years and the.
High single digit number.
Alright.
$600 million revenue number right. So that equate to talk 10 at about 400, and Phil are contributing and another 200 reflective already raised our long range guidance with the announcement of the pillar deal. There was a 200 incremental right to that Guy then.
That 400 million on that hot and is a very modest chair game compared to the share. We have now so we see ourselves as being very well positioned to achieve our feedback number on the back of those healthy market growth rates.
Knowing that we can see even further opportunity coming from the tailwind that we haven't seen the back half of this year associated with extra strength and some of attraction, we're getting in the market.
As far as evolution is concerned and we've learned a lot from launching a toxin in the U S and we've been very thoughtful about the launch cadence of the product as well as the revenue ramp associated with those products to get through our projections in 2028 and I've taken a conservative view as we typically do when we look that far out on how we expect those <unk>.
Adoptions to occur over the course of the the launch from 2025 2028.
Thank you.
Our next question comes from Doug side with H C. Wainwright. Please proceed with your question.
Hi, good afternoon, thanks for taking my questions.
It it gets David it sounds like you feel like you're taking market share across your account things, but I'm curious are there any.
Segments, where you feel like you're doing, particularly well and and over indexing and you can bet that by other customers or or maybe some patient demographics. I mean, obviously millennials have been a key target for you for some time you just any color is to to <unk>.
Where you might be sort of you'll be driving some competitive advantage.
Yeah. It's a good question, Doug you right from a consumer standpoint, we continue to.
Penetrate deeper and faster within this younger demographic are new to talks in patients that are consumer loyalty program are primarily millennial or younger and I think that bodes very well to where the practices are headed it also aligns with our investment in advertising that we've.
Placing and that continues to be a key driver how our brand is differentiated in the consumer's mind. This is very much a younger generations brand and its position to such an all of our advertising. What's also interesting, though when you look at our business across the U S. It's very diverse now or an 11000 clinic. So we don't.
Heavily over index in any one area of course.
And we continue to see broad based adoption of this brat now despite all of that where we other indexes penetration in the market. We're only in about a third of the category now with this product and we have two thirds of the market that is currently not using our brands you. Both so we see a lot of runway for the brand to continue to go.
Wider and you saw that this last quarter, we hit an all time high since our initial launch phase of new account added there wasn't a specific incentive in the field that drove that it was driven primarily by overall interest and what we're doing in the market and how we're doing business differently.
We believe that that speaks to the differentiation of our business Volk that practices are looking for ways to grow and they're looking at other ways of partnering with companies in our cafe proposition is opened up a number of opportunities to do business differently with us and we believe that that the continued trend that won't slow.
David just one follow up in terms of the two thirds of the market, where you're not currently doing business, but given your account growth. This quarter seems like your babies starting to make some progress.
There you.
You know anything that has limited you for those customers in the past and is there anything that you can do to improve penetration or is it something that you think will just occur over time. Thank you.
Yeah.
And the number of things the product is now in its fourth year in the market and under the Rd team was Ruiz the data we've generated since approval has been significant and the noise from the podium on that data between the millennial studies publish a millennial data we publish the mail data, we've published as well as.
This 40 unit dose, there's quite a bit of new data emerging on Jubal. That's number one the second is key opinion leaders.
Are becoming more and more engaged with our brat their understanding the unique profile of the precision of Chabot, that's being referenced from the podium.
Most recent medical meeting this summer.
We were the most mentioned brand on stage as we sat in that in that room and listened to the presenters speaking about the product that hadn't happened today. So I do believe that momentum is shifting at the medical meetings from the podium as well. So a combination of both is a key driver and then lastly, the recent announcement of at least.
Has resulted in even further engagement with that list from those key opinion leaders that one or some of them are currently in those trials others are aware of the fact that this really is a new generation of technology and they want to be a part of the future of where we're taking the company and I do believe that all of these are factors that.
Or a catalyst that continued to build on the execution that we've demonstrated over the last couple of years.
Great. Thank you and congrats the progress.
Thank you.
Our next question.
<unk> comes from surge Bellinger with Needham and company. Please proceed with your question.
Hi, good afternoon. Thanks for taking my questions. This one is on the <unk>.
Curious.
Any changes on the Corona.
<unk>.
And maybe we're against <unk> relative to your competitor products.
Sure well pricings continues to be a very stable in this market.
It certainly hasn't evolved significantly.
And we continue to benefit from a very favorable market from that standpoint, I don't I don't think you're seeing any any pricing wars amongst the manufacturers on the flip side, though you're not seeing price increases yet either in the market at least year to date, but it's a favorable environment and we're not seeing much evolving there.
Okay, and then going back to the Europeans you don't go in European lunch, obviously he's been.
Successful in U S outperforming.
The overall market trends, how do you look at doing that in Europe and.
You think the same opportunity exists to repeat what you've done to the U S.
Yeah, we really do having spent some time now in Europe and the markets as we've launched.
There's a tremendous amount of interest and Trialling, a new neurotoxin, then I would say look to be realistic for only three quarters in to the first market, which is the U K and Ah that trial stages, an important stage for any new neurotoxin entering an experienced they're getting with the products has been the same experience that they are getting in the United States, which is there.
[noise] favorable and we expect that as in Germany, and as well as Italy now of course building a business like we have in the U S. It takes a little bit of time and so it takes the right talent the right focus and continuing to do that over time and you start to see meaningful value that gets created from it. So I think we're on the right track in Europe .
Albeit three quarters into our first market two quarters into our second market in less than a quarter into our third so it's still early days, but we feel very good about the team and what they're accomplishing.
[laughter].
Our next question comes from Ballard, She Prasad with Barclays. Please proceed with your question.
Hi, This is makayla anthropologic. Thanks for taking our questions you sign up on the silver line, how would you compare I believe to that of competition like Alrighty fillers and thinking looking ahead. How are you thinking about how this other line will fit into your portfolio. Once you reached commercials <unk>. Thanks, so much.
Let me comment on on the product side differences I think as it relates to the filler overall as you know, we just announced the deal within the quarter and the second quarter. We're in the process now of ruin his team taking over all of the clinical development in the exchange with the FDA and we're really.
Pleased with the progress that team is made and we feel very confident in our ability to deliver on an approval in 2025 secondly, we're in the early stages of preparing our plants right with the launch expected in 2025, we saw a lot of work to do of establishing a scientific story the data itself.
Alison and capturing that working with the investigators on how to present it that data. So there's quite a bit of work that we have to do in order to develop it but importantly, we do have the infrastructure and the infrastructure is what we will be leveraging the sales force the digital footprint in the consumer loyalty program. So you can look forward to US uprising you have further <unk>.
Commercial details of how we bring this brand of market as we enter next year and closer to commercialization, but I'll, let you talk a little bit about how the market thinks about differences in the product sure in terms of when you asked about how does it compare to <unk>. The appropriate answer as you you shouldn't compare and once you have data to compare it so we haven't compared our product or a change we have her.
Wherever compared to our product to one of the market leaders, which is wrestling and so the two market leaders are represented by Jupiter Our men wrestling. So in Europe right now we have some preliminary data that's going to be used for the submission in Europe and what we find is a comparison really well and head to head studies for instance, the nail left we're seeing statistical superiority.
At three and six months and then there was a lip studies. That's also showing that it's almost twice as long to go back to baseline.
The early European experiments and then the U S trials are large trials those are outlined with active controls against one of the leaders right now Ah wrestling.
Thanks, so much.
We have reached the end of the question and answer session I'd now like to turn the call back over to management for closing remarks.
Thank you operator, if you missed any portion of this call a replay will be posted to our website. Later today. Thanks to everyone for joining US. We appreciate your interest in evolution and will be available if you have additional questions.
This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.
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