Q1 2024 Revance Therapeutics Inc Earnings Call

Yeah.

Operator: Welcome to the Revance Therapeutics first quarter 2024 financial results and corporate update conference call. At this time, all participants are in a listen only mode. Following management's prepared remarks, we will hold a Q&A session. To ensure that we have ample time to address everyone's questions, we would ask each person to limit themselves to one question and one follow-up. As a reminder, this call is being recorded today, Thursday, May 9, 2024. I would now like to turn the conference call over to Lawrence Watts of New Street Investor Relations. Please go ahead.

Welcome to the reverse therapeutics first quarter 'twenty 'twenty four financial results and corporate update conference call. At this time all participants are in a listen only mode. Following managers'. Following management's prepared remarks, we will hold a Q&A session.

Lawrence Watts: Joining us on the call today from Revance are President and Chief Executive Officer Mark Foley and Chief Financial Officer Toby Schilke. During this call, management will make forward-looking statements, including statements related to the impact of our pricing and strategy on VACs, fire, and adoption, expectations related to product adoption, account activation, and reorders, consumer needs, preferences, and behavior, the benefits and value to us, practices, and consumers of our products, including the efficacy, duration, skin quality, and safety of our products, Access to our products, future therapeutic indications, 2024 guidance, cash flow break-even, positive adjusted EBITDA, future capital expenditures, anticipated revenue and top-line growth, our strategic priorities, our anticipated success, our blockbuster potential, our ability to grow and take share, our market opportunity and expectations, our strategy, planned operations and commercialization plans, including consumer offers and timing of those plans.

Lawrence Watts: Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. Factors that could cause these results to be different from those expressed include factors the company describes in our annual report on Form 10-K and our quarterly report on Form 10-Q. Revance undertakes no duty or obligation to update any forward-looking statement as a result of new information, future events, or changes in its expectations.

Lawrence Watts: Also on today's call, we will present both GAAP and non-GAAP financial measures. Reconciliations of GAAP to non-GAAP measures are included in our earnings release. With that, I will turn the call over to Mark Foley, President and Chief Executive Officer of Revance.

Lawrence Watts: Sure that we have ample time to address everyones questions. We would ask each person to limit themselves to one question and one follow up as a reminder, this call is being recorded today Thursday may nine 2024, I would now like to turn the conference call over to Lawrence Watts of New Street Investor Relations. Please go ahead.

Mark J. Foley: Thank you operator.

Lawrence Watts: Joining us on the call today from <unk>, President and Chief Executive Officer, Mark Foley, and Chief Financial Officer, Toby Schulke.

Mark J. Foley: During this call management will make forward looking statements, including statements related to the impact about pricing on strategy on tax flatten adoption expectations related to product adoption account activation and reorders consumer needs preferences and behavior, the benefits and value to us practices and consumers of our products, including the efficacy durations.

Mark J. Foley: <unk> quality and safety of our products.

Mark J. Foley: As to our products future therapeutic indications 2024 guidance cash flow breakeven positive adjusted EBITDA future capital expenditures anticipated revenue and top line growth and strategic priorities, our anticipated success a blockbuster potential.

Mark J. Foley: Ability to grow and take share and market opportunity and expectations, our strategy plant operations and commercialization plans, including consumer office and timing of those plans.

Mark J. Foley: Actual results and the timing of events could differ materially from those anticipated in such forward looking statements. As a result of these risks and uncertainties factors that could cause these results to be different from these statements include factors. The company describes in our annual report on Form 10-K, and our quarterly report on Form 10-Q.

Lawrence Watts: <unk> undertakes no duty or obligation to update any forward looking statement as a result of new information future events or changes in its expectations.

Lawrence Watts: Also on today's call, we will present, both GAAP and non-GAAP financial measures reconciliations of GAAP to non-GAAP measures are included in our earnings release with that I will turn the call over to Mark Foley, President and Chief Executive Officer of prevents Mark.

Mark J. Foley: Thank you, Lawrence. Good afternoon, everyone, and thank you for joining our first quarter 2024 financial results conference call. Q1-24 was the second full quarter reflecting DAXify's strategy change, and we are encouraged by the ongoing traction and momentum that we are seeing related to this change. Specifically, DAXified aesthetic units sold were up 105% year over year and notably up 7% on a quarter over quarter basis, despite Q1 traditionally being a seasonally down quarter when compared to Q4.

Mark J. Foley: Thank you Laura good afternoon, everyone and thank you for joining our first quarter 2024 financial results conference call Q.

Mark J. Foley: Q2, Q1, 24 was the second full quarter, reflecting back defies strategy change and we are encouraged by the ongoing traction and momentum that we're seeing related to this change.

Mark J. Foley: Specifically sacrifice Delek units sold were up 105% year over year, and notably up 7% on a quarter over quarter basis. Despite Q1, traditionally being a seasonally down quarter when compared to Q4.

Mark J. Foley: Moreover, Daxify grew its market share from 3% at the end of Q4'23 to 3.7% at the end of Q1'24, highlighting not only its ability to grow but also take share. In the first quarter, DACFI net revenue was $22.1 million after a reduction of $2 million related to our consumer coupon program, which functioned like a rebate.

Mark J. Foley: Moreover, <unk> grew its market share from 3% at the end of Q4 23 to three 7% at the end of Q1, 'twenty four highlighting not only its ability to grow but also take share.

Mark J. Foley: In the first quarter Jakafi net revenue was $22 $1 million after a reduction of $2 million related to our consumer coupons program, which function like a rebate.

Mark J. Foley: While we were encouraged by the feedback we received on the Consumer Coupon Program, we will look to structure future offerings in a way that doesn't require a full revenue offset and that is more consistent with competitor programs from a revenue treatment and sales and marketing expense perspective. Importantly, feedback from the field continues to be positive and reveals that practices are reengaging with Dactify, not only because of its duration profile but also because of its fast onset and improved skin quality, which is made possible by its unique and differentiated peptide formulation.

Mark J. Foley: While we were encouraged by the feedback we received on the consumer coupon program, we will look to structure future offerings in a way that doesn't require a full revenue offset and that is more consistent with competitor programs from a revenue treatment and sales and marketing expense perspective.

Mark J. Foley: Importantly feedback from the field continues to be positive and reveals that practices are re engaging with that defy not only because of its duration profile, but also because of its fast onset and improve skin quality, which is made possible by its unique and differentiated peptide formulation.

Mark J. Foley: To that end, in the quarter, I was able to personally meet with over 200 injectors across a variety of regional dinners and office visits, and I was very encouraged by the receptivity, feedback, and support we are getting as a result of our new strategy. With our reduced price to the practice, we are encouraged to see that accounts are passing along the savings to their patients, thereby allowing them to experience Daxify's performance benefits at a price that is in line with other top. At the end of the day, customers are reporting that they are choosing to lean in with Daxify because they feel it is a better product.

Mark J. Foley: To that end in the quarter I was able to personally meet with over 200 injectors across a variety of regional dinners in office visits and I was very encouraged by the receptivity feedback and support we are getting as a result of our new strategy.

Mark J. Foley: With our reduced price to the practice, we are encouraged to see that accounts are passing along the savings to their patients, thereby allowing them to experience sacrifice performance benefits at a price that is in line with other toxins at.

Mark J. Foley: At the end of the day customers are reporting that they are choosing to lean in with apt to buy because they feel it is a better product.

Mark J. Foley: In the quarter, we also launched a new Daxify messaging campaign titled The Daxify Difference, Fast, Last, and Look. And we removed the no advertised price limitation, which has allowed accounts to more easily promote Daxify to their customers and which will help further amplify Daxify's voice in the market. Consistent with prior commentary, our last two quarters were focused on existing Daxify accounts in order to reestablish confidence and a more positive relationship going forward. We believe that this focus was necessary to build the right foundation for long-term success.

Mark J. Foley: In the quarter, we also launched a new doctor find messaging campaign titled the Doctor by difference fast laps and the look.

Mark J. Foley: And we removed the no advertised price limitation, which is allowed accounts to more easily promote gasify to their customers and which will help further amplified <unk> voice in the market.

Mark J. Foley: Consistent with prior commentary our last two quarters, we're focused on existing Jakafi accounts in order to reestablish confidence in a more positive relationship going forward. We believe that this focus was necessary to build the right Foundation for long term success.

Mark J. Foley: Now that we have concluded this phase, we expect to return to a more normal new account cadence and portfolio focus. In the quarter, we were also encouraged by the strong reordering activity as existing accounts represented more than two-thirds of DAXified revenue in the quarter, with the higher average order size per account representing deeper penetration.

Mark J. Foley: Now that we have concluded this phase we expect to return to a more normal new account cadence and portfolio focus.

Mark J. Foley: In the quarter. We were also encouraged by the strong reordering activity as existing accounts represented more than two thirds of jakafi revenue in the quarter. The higher average order size per account representing deeper penetration.

Mark J. Foley: Consumer end pricing is coming in line with competitor prices, reflecting that the strategy change is having the desired effect. All of which has contributed to a meaningful uptick in unit sales on both an annual and quarterly basis, as well as a healthy gain in market share. Turning to RHA, despite filler market softness in Q1 and outside Daxify's focus, we continued to grow our filler market share and ended Q1 with a 9.8% share, up from 9.1% in Q4.

Mark J. Foley: Consumer and pricing coming in line with competitor prices, reflecting that the strategy change is having the desired effect.

Mark J. Foley: All of which has contributed to a meaningful uptick in unit sales on both an annual and quarterly basis as well as a healthy gain in market share.

Mark J. Foley: Turning to our U K, despite filler market softness in Q1 and outside tax if I focus we continue to grow our filler market share and ended Q1 with a nine 8% share up from nine 1% in Q4.

Mark J. Foley: While RHA revenue declined 2% year-over-year, our ability to take share in a soft filler quarter positions us well going forward, particularly as the market returns to more normal growth, we launch some of our new initiatives, and as our focus shifts to a more balanced portfolio approach. Underpinning our ongoing market share gains and traction in the filler market is the quality and differentiated performance profile of the RHA portfolio, combined with our commercial team's ability to execute.

Mark J. Foley: While our revenue declined 2% year over year, our ability to take share in a soft filler quarter positions us well going forward, particularly as the market returns to more normal growth, we launched some of our new initiatives and as our focus shifts to a more balanced portfolio approach.

Mark J. Foley: Underpinning our ongoing market share gains and traction in the filler market is the quality and differentiated performance profile of the <unk> portfolio combined with our commercial team's ability to execute.

Mark J. Foley: As we move into Q2, we are excited to be launching RHA-3 for lip augmentation and fullness, as lips are the number one filler procedure performed in the U.S. And while Q1 revealed some softness in the US filler market, we expect the market to return to historic high single-digit growth through the balance of 2024.

Mark J. Foley: As we move into Q2, we are excited to be launching our <unk> III for lip augmentation in fullness as lifts are the number one filler procedure performed in the U S.

Mark J. Foley: And while Q1 revealed some softness in the U S filler market, we expect the market to return to historic high single digit growth through the balance of 2024.

Mark J. Foley: To this end, we are encouraged by the early traction and momentum we are seeing in Q2 related to both the filler and toxin markets. Lastly, at the end of the first quarter, there were over 7,500 aesthetic accounts, of which 3,500 have ordered Daxify, which leaves us with significant runway to further expand our number of accounts and ordering base going forward. Now let me turn to our therapeutic franchise. This afternoon, we announced the commercial launch of Daxify for the treatment of cervical dystonia, marking our entry into the $2.7 billion U.S. therapeutic neurotoxin market, which is projected to grow 8% annually over the next five years.

Mark J. Foley: To this end we are encouraged by the early traction and momentum we are seeing in Q2 related to both the filler and toxin markets.

Mark J. Foley: Lastly at the end of the first quarter. There were over 7500 aesthetic accounts of which 3500 have ordered <unk>, which leaves us with significant runway to further expand our number of accounts and ordering base going forward.

Mark J. Foley: Now, let me turn to our therapeutic franchise. This afternoon, we announced the commercial launch of <unk> for the treatment of cervical dystonia, marking our entry into the $2 $7 billion U S therapeutic neurotoxin market, which is projected to grow 8% annually over the next five years.

Mark J. Foley: Daxify is the first and only peptide formulated long-lasting neurotoxin that offers the potential to improve duration of symptom control with a favorable safety profile, providing patients and physicians with a compelling new treatment option for a painful and disabling chronic condition. Doxify for cervical dystonia provides a significant opportunity for rethinking and marks the culmination of our decades-long mission to bring true innovation to the therapeutics market. While toxins are the gold standard of care for cervical dystonia, patients struggle to achieve sustained symptom relief between treatments.

Mark J. Foley: <unk>, the first and only peptide formulated long lasting neurotoxin that offers the potential to improve duration of symptom control with a favorable safety profile, providing patients and physicians with a compelling new treatment option for a painful and disabling chronic condition.

Mark J. Foley: <unk> for cervical dystonia provides a significant opportunity for revamps and marks the culmination of our decades long mission to bring true innovation to the therapeutics market.

Mark J. Foley: While toxins are the gold standard of care for cervical dystonia patients struggled to achieve sustained symptom relief in between treatments.

Mark J. Foley: This is due to the fact that toxin treatment can only occur every 12 weeks based on product labeling and reimbursement guidelines, even though the therapeutic benefit of current toxins typically wears off 8 to 10 weeks after injection. As a result, this frequently leaves patients with unmanaged symptoms that can lead to significant pain, social stigma, and the inability to drive or work.

Mark J. Foley: This is due to the fact that toxin treatment can only occur every 12 weeks based on product labeling and reimbursement guidelines, even though the therapeutic benefit of current toxins typically wears off eight to 10 weeks after injection as.

Mark J. Foley: As a result, this frequently lease patients with unmanaged symptoms that can lead to significant pain, social stigma and the inability to drive or work back.

Mark J. Foley: Daxify has the potential to offer CD patients more good days and better symptom control in between treatments, ending the rollercoaster ride that many cervical dystonia patients experience. Following our CD approval in August of 2023, we launched the Preview Early Experience Program with the objective of optimizing treatment outcomes and ensuring smooth practice integration. To date, real-world clinical results from Preview, which has now ceased enrollment as we move into our full launch, are in line with our prior Aspen Clinical Program, providing us with a strong foundation for commercial success. The program enrolled over 300 patients, most of whom are now on their second treatment cycle.

Mark J. Foley: <unk> has the potential to offer CD patients more good days and better symptom control in between treatments ending the roller coaster ride that many cervical dystonia patients experience.

Mark J. Foley: Following our CD approval in August of 2023, we launched the preview early experience program with the objective of optimizing treatment outcomes in ensuring smooth practice integration.

Mark J. Foley: To date real World clinical results from preview, which has now ceased enrollment as we move into our full launch are in line with our prior accident clinical program, providing us with a strong foundation for commercial success.

Mark J. Foley: The program enrolled over 300 patients most of which are now in their second treatment cycle.

Mark J. Foley: Based on a survey we conducted, which included all 17 physicians who participated in the PREVIEW program since inception, 94% indicated that they perceived Daxify to last longer than what they had seen with conventional botulinum toxins based on just their first treatment cycle experience and prior to dose optimization. Additionally, we've been pleased to see that Daxify's safety profile continues to be encouraging over a broad range of doses. We look forward to sharing some of our pre-due insights at upcoming medical meetings.

Mark J. Foley: Just on a survey we conducted which included all 17 physicians who participated in the preview program since inception, 94% indicated that they perceived jakafi to last longer than what they had seen with conventional botulinum toxins based on just their first treatment cycle experience and prior to dose optimization.

Mark J. Foley: Additionally, we've been pleased to see the sacrifice safety profile continues to be encouraging over a broad range of doses.

Mark J. Foley: We look forward to sharing some of our pre new insights at upcoming medical meetings.

Mark J. Foley: Post approval, we established our therapeutics commercial infrastructure in preparation for launch and received our permanent J code, which will streamline the reimbursement pathway for providers. Additionally, we operationalized our Access Daxify reimbursement support services in order to minimize potential hurdles to adoption. Within that platform, we have tools and resources to support practices, including our patient affordability programs, a co-paid program for the underinsured, and a patient assistance program to ensure out-of-pocket costs do not impede access to therapy.

Mark J. Foley: Post approval, we established our therapeutics commercial infrastructure in preparation for launch and received our permanent J code, which will streamline the reimbursement pathway for providers.

Mark J. Foley: Also we operationalized, our access tax defy reimbursed reimbursement support services in order to minimize potential hurdles to adoption within that platform, we have tools and resources to support practices, including our patient affordability programs. The co pay program for the under insured and a patient assistance program to ensure.

Mark J. Foley: Out of pocket costs do not impede access to therapy.

Mark J. Foley: Currently, Doxify is covered for over 78% of commercial lives, which, when combined with our government coverage, represents over 200 million lives and includes the top health plans in the US. We are energized by our mission to positively impact the lives of cervical dystonia patients and believe that we have the right payer infrastructure in place to facilitate the smooth switch process. That said, given the conservative nature of the treating physicians and the CD market size, we anticipate initial revenues will be modest.

Mark J. Foley: Currently <unk> is covered for over 78% of commercial lives, which when combined with our government coverage represents over 200 million lives and includes the top health plans in the U S.

Mark J. Foley: We're energized by our mission to positively impact the lives of cervical dystonia patients and believe that we have the right payer infrastructure in place to facilitate a smooth switch process.

Mark J. Foley: That said given the conservative nature of the treating physicians and CD market size, we anticipate initial revenues will be modest.

Mark J. Foley: However, we remain bullish regarding <unk> potential in the cervical dystonia market and subsequent therapeutic indications and our preview results have only help to further increase our confidence in <unk> long term potential and the therapeutics market.

Mark J. Foley: However, we remain bullish regarding Daxify's potential in the cervical dystonia market and subsequent therapeutic indications, and our preview results have only helped to further increase our confidence in Daxify's long-term potential in the therapeutics market. Before I turn the call over to Toby to cover our first quarter financials, I want to highlight the progress we're making on one of our other 2024 strategic priorities, namely focused and disciplined capital allocation. In conjunction with our DAXified strategy change, we've implemented a number of OPEX efficiency measures designed to both streamline and lower our overall operating expense profile, while also ensuring that we can free up the necessary capital to invest in both our aesthetics and therapeutics franchises.

Mark J. Foley: Before I turn the call over to Toby to cover our first quarter financials I want to highlight the progress we're making on one of our other 2024 strategic priorities, namely focused and disciplined capital allocation.

Mark J. Foley: In conjunction with our <unk> strategy change, we've implemented a number of opex efficiency measures designed to both streamline and lower our overall operating expense profile. While also ensuring that we can free up the necessary capital to invest in both our aesthetics and therapeutics franchises I'm.

Mark J. Foley: I'm pleased to report that we are ahead of schedule with respect to these efforts, and Toby will touch on that shortly. With over $275 million in cash, cash equivalents, and investments at the end of Q1, the ongoing growth and opportunity we have with DAXify and RHA, and initiatives in place for the second quarter and balance of the year, we are reiterating our guidance, which includes net product revenue of at least $280 million, non-GAAP OPEX of $290 million to $310 million, which is currently trending to the low end of the range With that, I'll turn the call over to Toby to cover our first quarter financials.

Mark J. Foley: I am pleased to report that we are ahead of plan with respect to these efforts and Toby will touch on that shortly.

Toby: With over $275 million in cash cash equivalents and investments at the end of Q1, the ongoing growth and opportunity, we have with <unk> and <unk> and.

Toby: <unk> is in place for the second quarter and balance of the year. We are reiterating our guidance, which includes net product revenue of at least $280 million.

Toby: non-GAAP Opex of 290 million to $310 million, which is currently trending to the low end of the range.

Toby: And our goal of reaching.

Toby: Positive adjusted EBITDA in 2025.

Mark J. Foley: With that I'll turn the call over to Toby to cover our first quarter financials.

Tobin C. Schilke: Thank you, Mark. In the press release and the 10Q we issued today, the details are financial results in full. So I will only go over the highlights on this call. Our fintech platform business, which was our legacy service segment, is now a discontinued operation and is reflected as such on our financial statement. Consequently, the results that I will discuss exclude discontinued operations. Total revenue for the first quarter ended March 31st, 2024, was $51.9 million, compared to $45.8 million for the same period last year, representing a 13% increase in revenue due to DAXify.

Toby: Thank you Mark.

Tobin C. Schilke: Press release, and the 10-Q, we issued today details our financial results in full so I will only go over the highlights on this call.

Tobin C. Schilke: Our Fintech platform business, which was our legacy service segment is <unk>.

Tobin C. Schilke: Now a discontinued operation and is reflected as such on our financial statements. Consequently, the results that I will discuss next.

Tobin C. Schilke: Net revenue for the first quarter included $29.6 million of RHA collection revenue, $22.1 million of Daxapai revenue, and $0.2 million of collaboration revenue related to our biosimilar to Botox program with VHS. Total operating expenses from continuing operations for the first quarter were $98.8 million compared to $92.5 million for the same period in 2023. Excluding the cost of product revenue, stock-based compensation, depreciation, and amortization, non-GAAP operating expenses from continuing operations for the first quarter were $73.6 million compared to $64.5 million for the same period in 2023.

Tobin C. Schilke: Exclude discontinued operations.

Tobin C. Schilke: Total revenue for the first quarter ended March 31, 2024 was $51 9 million compared to $45 8 million for the same period last year, representing a 13% increase in revenue due to that supply.

Tobin C. Schilke: Net revenue for the first quarter included $29 $6 million of RH, a collection revenue $22 $1 million of <unk> revenue and zero point $2 million of collaboration revenue related to our Biosimilar to Botox program with DHS.

Tobin C. Schilke: Total operating expenses from continuing operations for the first quarter were $98 8 million.

Tobin C. Schilke: Compared to $92 5 million for the same period in 2023.

Tobin C. Schilke: Excluding cost of product revenue.

Tobin C. Schilke: <unk> based compensation depreciation and amortization non-GAAP operating expenses from continuing operations for the first quarter were $73 6 million compared.

Tobin C. Schilke: Compared to $64 5 million for the same period in 2023.

Tobin C. Schilke: As Mark alluded to, we are reiterating our guidance for 2024, and specifically related to our non-GAAP OPEX guidance of $290 to $310 million, we are currently trending to the low end of that range due to cost savings and other efficiency initiatives. On the balance sheet side, our current cash position, bolstered by an equity offering in the first quarter, which resulted in gross proceeds of $100 million, in combination with our operating plan, provides us with multiple levers to achieve positive adjusted EBITDA in 2025. Finally, Revance's shares of common stock outstanding as of April 30, 2024, were approximately $104.4 million, with approximately $113.5 million fully diluted shares, excluding the impact of convertible debt.

Tobin C. Schilke: As Mark alluded to we are reiterating our guidance for 2024, and specifically related to our non-GAAP opex guidance of $290 to $310 million. We are currently trending to the low end of that range due to cost savings and other efficiency initiatives.

Tobin C. Schilke: On the balance sheet side, our current cash position bolstered by an equity offering in the first quarter, which resulted in gross proceeds over $100 million in.

Tobin C. Schilke: In combination with our operating plan provides us with multiple levers to achieve positive adjusted EBITDA in 2025.

Tobin C. Schilke: Finally, <unk> shares of common stock outstanding as of April 32024, or approximately 104.

Tobin C. Schilke: $104 4 million with approximately $113 5 million fully diluted shares excluding the impact of convertible debt.

Mark J. Foley: And with that, I'll turn the call back over to Mark.

Mark J. Foley: And with that I'll turn the call back over to Margaret.

Mark: Thank you Toby for the rest of 2024, we remain focused on delivering at least 32% topline growth, while effectively managing spend to reach positive adjusted EBITDA in 2025.

Mark J. Foley: Thank you, Toby. For the rest of 2024, we remain focused on delivering at least 32% top-line growth while effectively managing spend to reach positive adjusted EBITDA in 2025. We believe this is achievable through successful execution on our DACTIFY and RHA growth initiatives in aesthetics, our launch of DACTIFY in cervical dystonia, and through maintaining disciplined capital allocation while ensuring we have the necessary resources to fund our two franchises. We remain encouraged by our ongoing market share gains across both Daxify and RHA and the positive response we are seeing to our Daxify strategy change as reflected by the significant increase in unit volume on As a result, we continue to have conviction in our blockbuster potential in the U.S. aesthetics market. With that, I will now open the call to questions. Operator?

Mark J. Foley: We believe this is achievable through successful execution on our <unk> and <unk> growth initiatives and aesthetics, our launch of DAC defy in cervical dystonia and through maintaining disciplined capital allocation, while ensuring we have the necessary resources to fund our two franchises.

Mark J. Foley: We remain encouraged by our ongoing market share gains across cross both back defy NRA Jay and the positive response, we are seeing <unk> strategy change as reflected by the significant increase in unit volume on a year over year and quarterly basis.

Mark J. Foley: As a result, we continue to have conviction in our blockbuster potential in the U S aesthetics market.

Speaker Change: With that I will now open the call up for questions operator.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If, for any reason at all, you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. As a quick reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. The first question comes from Seamus Fernandez on Guggenheim. You may proceed.

Speaker Change: We will now begin the question and answer session. If you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason that all I would like to remove that question. Please press star followed by two.

Operator: To ask a question please press star one.

Operator: Reminder, if you are using a speaker phone. Please remember to pick up your handset before asking your question.

Operator: The first question comes from Seamus Fernandez with Guggenheim You May proceed.

Seamus Christopher Fernandez: Oh, great. Thanks for the question. So, Mark, I just wanted to get a better sense of the trajectory that you're already seeing in the second quarter so far. Obviously, the $22 million would have been $24 million without the couponing program, but presumably you knew about the couponing dynamics. So just trying to get a better sense of the trajectory that you're seeing. I know that the plan was to accelerate, to expand the number of injectors in the second quarter with a full push after you had really reestablished the pricing.

Seamus Christopher Fernandez: Oh, great. Thanks for the question so.

Seamus Christopher Fernandez: Mark I, just wanted to get a better sense of it.

Seamus Christopher Fernandez: The trajectory that youre already seeing in the second quarter so far.

Seamus Christopher Fernandez: The $22 million would have been 24 without the couponing program, but presumably you knew about the couponing.

Seamus Christopher Fernandez: Dynamics.

Seamus Christopher Fernandez: So just trying to get a better sense of the trajectory that youre seeing I know that the plan was to accelerate.

Seamus Christopher Fernandez: To expand.

Seamus Christopher Fernandez: The number of.

Seamus Christopher Fernandez: Injectors in the second quarter with a full push after you had really reestablished the pricing.

Seamus Christopher Fernandez: So just wanted to get a better sense of what youre seeing so far.

Seamus Christopher Fernandez: So just wanted to get a better sense of what you're seeing so far in these, you know, first five weeks of the second quarter to give you confidence that that $280 million minimum guidance threshold is achievable. And then the second part of that question, also related to guidance, is just the filler dynamics. You know, obviously, we're seeing a lot of pushes and pulls there, but you do have the launch of the new sort of lip formulation, RH3. So, can you just help us understand, you know, what you see as the incremental revenue opportunity there, just given the, you know, sort of high frequency of lip filler use? Thanks.

Seamus Christopher Fernandez: These first five weeks of the second quarter to give you confidence that that $280 million minimum guidance thresholds.

Seamus Christopher Fernandez: Is achievable and then the second part of that question also related to guidance is just the filler dynamics.

Seamus Christopher Fernandez: Obviously, we're seeing a lot of pushes and pulls there, but you do have the launch of the.

Seamus Christopher Fernandez: The new.

Seamus Christopher Fernandez: Sort of lip formulation of <unk> III.

Seamus Christopher Fernandez: So.

Seamus Christopher Fernandez: Can you just help us understand what you see as the incremental revenue opportunity there just given the sort of high frequency.

Seamus Christopher Fernandez: Filler use thanks.

Mark J. Foley: Sure. So, Seamus, let me start with the first one in terms of our confidence in the, you know, product revenue guidance of at least $280 million. You know, as you noted, we were very pleased with the Daxify performance in Q1, and as we've made the shift in the pricing change, it's all about getting trial usage and experience because we believe that the more accounts and consumers that get exposed to Daxify and its performance attributes, not just duration, but skin quality and onset, that, you know, that's where the stickiness comes from.

Seamus Christopher Fernandez: Sure. So Seamus, let me start with the first one in terms of our confidence in the product revenue guidance of at least $280 million. As you noted we were very pleased with the docs by performance in Q1 and as we've made the shift in the pricing change its all about getting trial usage and experience because we believe that.

Mark J. Foley: The more accounts and consumers that it get exposed to diversify and its performance attributes not just duration, but skin quality and onset that that's where the stickiness creates and obviously, we're trying to build a growing base of accounts and customers and we saw that pull through at the account level, where we saw.

Mark J. Foley: And obviously, we're trying to build a growing base of accounts and customers, and we saw that pull through at the account level where we saw, you know, more accounts ordering larger quantities, which is a good early sign for us. And so, when we kind of look through the course of the year, we would expect, you know, to have sequential growth throughout the year, certainly on the Daxify side as we layer in more accounts.

Mark J. Foley: More accounts ordering larger quantities, which is a good early sign for us.

Mark J. Foley: And so when we kind of look through the course of the year, we would expect to have sequential growth throughout the year certainly on the <unk> side as we layer in more accounts and given our outsized focus on Jakafi. The first two quarters and doubling back we would expect that new account adds will start to elevate as we move towards that.

Mark J. Foley: And, you know, given our outsized focus on Daxify in the first two quarters and doubling back, we would expect that, you know, new account ads will start to escalate as we, you know, move towards the remainder of the year. In terms of what we're seeing in Q2, there's typically a cadence in terms of the quarterly phasing or the monthly phasing in a quarter. The first month of the quarter tends to be the lightest, followed by the second, and followed by the third.

Mark J. Foley: The remainder of the year in terms of what we're seeing in Q2 there is.

Mark J. Foley: <unk> a cadence in terms of the quarterly phasing or the monthly phasing in a quarter first months of the quarter tends to be the lightest followed by the second and followed by the third but we're seeing good volumes at least the accounts that we are in.

Mark J. Foley: But, you know, we're seeing good volumes in at least the accounts that we are in through April and the early part of May across both the toxin and, notably, the filler side of it. You know, it's probably hard to tell right now on the filler side of it how much of that is our launch of the lip indication because, as you mentioned, that's certainly going to be a tailwind for us.

Mark J. Foley: Through April and the early part of May across both.

Mark J. Foley: Toxin and notably the filler side of it.

Mark J. Foley: Really hard to tell right now on the filler side of it how much of that is our launch of the lip indication because as you mentioned that that's certainly going to be a tailwind for us.

Mark J. Foley: And we have some other initiatives that will be rolling out through the balance of the year around portfolio plans and other practice based initiatives designed to reward engagement and volume.

Mark J. Foley: So.

Mark J. Foley: And we have some other initiatives that we'll be rolling out through the balance of the year around portfolio plans and other practice-based initiatives designed to, you know, reward engagement and volume. And so, we like what we're seeing early on in Q2 from that perspective. Again, I do think given that lips are the number one indication that helps.

Mark J. Foley: We like what we're seeing early on in Q2 from that perspective again, I do think given the debt that lifts are the number one.

Mark J. Foley: Indication that helps and I do think our reps now are spending more time with a balanced selling approach not just.

Mark J. Foley: And I do think our reps now are spending more time with a balanced selling approach, not just, you know, more Daxify focused. So it's early, but, you know, again, if you go back to the market share gains that we saw in Q1, we really like our positioning and our ability to continue to take share. So we continue to feel very good about how we think the rest of the year is going to play out.

Mark J. Foley: More <unk> focused so it's early but again if you go back to the market share gains that we saw.

Mark J. Foley: In Q1, we really like our positioning and our ability to continue to take share. So we continue to feel very good about how we think the rest of the year is going to play out.

Seamus Christopher Fernandez: Great. And maybe just one final question.

Speaker Change: Great and maybe just a final question on the therapeutic side.

Seamus Christopher Fernandez: You're continuing to guide pretty conservatively in terms of how to think about the therapeutic contribution in 2024, but given all the progress that you've made with the J code.

Mark J. Foley: On the therapeutic side, you know, you continue to guide pretty conservatively in terms of how to think about the therapeutic contribution in 2024. But given all the progress that you've made with the J code and, you know, the opportunity for reimbursement, how do you feel about your position? Do you feel your positions to perhaps do better this year from a therapeutics perspective to be able to deliver on that guidance? Or is the guidance, from your perspective, pretty locked and loaded as it relates to, you know, the aesthetics business, and you just feel good about the trajectory of the business on aesthetics, and you should think about therapeutics as predominantly incremental? Yeah, I think it's the latter. Again,

Mark J. Foley: And.

Mark J. Foley: The opportunity for <unk>.

Mark J. Foley: Reimbursement.

Mark J. Foley: How do you feel your position do you feel you are positioned to perhaps do better this year from a therapeutics perspective to.

Mark J. Foley: To be able to deliver on that guidance or is the guidance from your perspective pretty locked and loaded as it relates to <unk>.

Mark J. Foley: <unk> business and.

Mark J. Foley: And you just feel good about the trajectory of the business on aesthetics, and you should think about therapeutic.

Mark J. Foley: Predominantly incremental.

Mark J. Foley: And so, you know, given that it's a buy and build product in these practices, that's why you don't get those sort of early stocking orders. They want to treat a few patients, make sure that they can get paid, start, you know, conservatively with dosing, and then figure out, you know, how to optimize.

Mark J. Foley: Yeah, I think it's the latter. Again, we are very encouraged by what we're seeing in the therapeutics business, particularly based on the preview engagement. And, you know, taking the measured approach that we did not only gave us really good feedback from the clinicians, but it allowed us to really put in place the entire kind of reimbursement process from the J code to the coverage of the commercial level to patient access programs.

Mark J. Foley: Yes, I think it's the latter again, we are very encouraged by what we're seeing in the therapeutics business, particularly based on the preview engagement in that taking the measured approach that we did not only gave us really good feedback from the clinicians, but it allowed us to really put in place.

Mark J. Foley: The entire kind of reimbursement process from the J code to the coverage at the commercial elaborate level to patient access programs and so.

Mark J. Foley: Given that it's a buy and bill product in these practices Thats why you don't get the sort of early stocking orders they want to treat a few patients make sure that they can get paid start conservatively with dosing and then figure out how to optimize but we believe that once they get through that early phase, which will take a little bit then we would expect to see.

Mark J. Foley: But we believe that once they get through that early phase, which will take a little bit, then, you know, we would expect to see meaningful share gains on that. So I think if you time out 2024, as accounts start to work through that phase, we will certainly see some that lean in more aggressively early, but we think most are going to kind of go through that. So we would expect a much more meaningful contribution as we move into 25.

Mark J. Foley: Full share gains on that so I think if you time out 2024 as accounts start to work through that phase, we will certainly see some that lean in more aggressively early but we think most are going to kind of go through that so we would expect much more meaningful contribution as we move into 'twenty five.

Mark J. Foley: But it's more, as you said, we have, you know, we expect aesthetics to carry a big chunk of this year and that therapeutics will be incremental. And, you know, we could be surprised a little bit on the upside, but that's how we're thinking about it from our internal modeling.

Mark J. Foley: But it's more as you said, we have we expect aesthetics is going to carry a big chunk of this year and that.

Mark J. Foley: <unk> therapeutics will be incremental and we could be surprised a little bit on the upside, but that's how we're thinking about it from our from our internal modeling.

Speaker Change: Great. Thanks, so much.

Speaker Change: Thanks Seamus.

Speaker Change: Thank you.

Stacy Ku: Thank you. The next question comes from Stacy Ku with TD Cowan. You may proceed. Hi, thanks so much for taking our questions and congratulations on the progress. We have a few follow-ups on the first question. So can you just talk about your evolving thoughts on the RIJ contribution this year? And to ask a little bit more specifically, if we take your guidance, we do need to see strong growth over the next few quarters.

Mark J. Foley: Question comes from Stacy <unk> with TD Cowen you May proceed.

Stacy Ku: So if we understand kind of how Q1 looks, it looks like it's at similar levels to last year. So does this help us feel comfortable with your belief that we could meaningfully grow beyond 2023 RIJ sales? Is it really that RIJ 3 launch that's really going to kind of increase share there?

Stacy Ku: Hi, Thanks, so much for taking our questions and congrats on the progress we have a few follow ups.

Stacy Ku: On the first question so can.

Stacy Ku: Can you just talk about your evolving thoughts on the R&D contribution this year.

Stacy Ku: And to ask a little bit more specifically, if we take your guidance, we do need to see strong growth over the next few quarters. So if we understand kind of how Q1 looks it looks like it's at similar levels to last year. So that's helped us.

Stacy Ku: Feel comfortable with our belief that we can meaningfully grow beyond 2023. R&D is now is it really that RSA three lines, that's really going to kind of increase increased share that and then the second question is looking to Q2 previously you've discussed it takes around a quarter for an account to sample and drydocks.

Mark J. Foley: And then the second question is looking to Q2. Previously, you discussed it takes around a quarter for an account to sample and try Docsify before ordering. So does this help us set expectations in terms of the timing of sales acceleration versus a usual list of seasonality that you'll see in the aesthetic market for Q2? That's the second question, just kind of the dynamics between broadening the accounts versus the normal time for sampling.

Mark J. Foley: 84, ordering so just help us set expectations in terms of the timing of sales acceleration versus usual list seasonality lift that youll see anesthetic market for key Kim just a second question just kind of the dynamics between broadening the accounts versus the normal the normal time for sampling and then the last.

Mark J. Foley: And then the last question, just curious if you're willing to comment, as you discussed your plans of going broader and deeper with accounts that you've already onboarded for Docsify. Can you talk about what percentage have made it their primary neurotoxin in their practice versus just, you know, one of the offerings? So just curious how you're doing as you go deeper with some of the relationships. Thanks so much.

Mark J. Foley: Question, just curious if youre willing to comment as you discussed your plans of going broader and deeper in the.

Mark J. Foley: The costs that you've already onboard at <unk> can you talk about what percentage has had immediate their primary neurotoxin in their practice versus just one of the offerings. So just curious how.

Mark J. Foley: How youre doing as you go deeper with some of your relationships. Thanks, so much.

Mark J. Foley: Sure, so thanks, Stacy, let me kind of walk you through these. So first, in terms of kind of how we think again about the cadence of revenue and what you'd need to see in terms of growth and what's gonna drive that. Listen, Q1 was softer on the filler side than we expected. But, you know, if you look at it, we actually had pretty healthy share growth even with, again, an outsized focus on Daxify. So I think we're continuing to take share based on the quality of the product. You know, we expect the market will return to more normal high single-digit growth.

Mark J. Foley: Sure.

Speaker Change: So thanks, Stacy let me kind of walk through these so first in terms of kind of how we think again about the cadence of revenue and what you'd need to see in terms of growth and what's going to drive that you list in Q1 was softer on the filler side than what we expected.

Mark J. Foley: If you look at it we actually had pretty healthy share growth, even with again, an outsized focus on <unk>. So I think we're continuing to take share based on the quality of the product. We expect the market will return to more normal high single digit growth.

Mark J. Foley: And so, you know, we believe that will also be a tailwind for us as we continue to take share with RHA. You know, previously when we've given contextual guidance to our, you know, 280 million, you know, more than 280 million in product, we said a little more than half of that's gonna be RHA. And so if you kind of look at what that means from a year over year growth perspective, you can kind of get there in sort of a teens growth on RHA, which we think is manageable, particularly when you start layering in, you know, the RHA three for lifts, some of the promos that we're gonna run around that, the fact that it's the number one perform for filler procedure.

Mark J. Foley: So we believe that will also be a tailwind for us as we continue to take share with our <unk>.

Mark J. Foley: Youll previously when we've given contextual guidance to our $280 million more than $280 million in product, we said a little more than half of that is going to be <unk> and so if you kind of look at what that means from a year over year growth perspective, you can kind of get there in sort of a teens growth on our <unk>, which we think is manageable, particularly when you start layering in.

Mark J. Foley: <unk>.

Mark J. Foley: The <unk> III for lists some of the promos that we're going to run around that the fact that it's the number one performed pillar procedure and then we do expect to start to benefit from some portfolio programs based on our broader account base in ways that we will be able to leverage one product with the other two incentive.

Mark J. Foley: And then we do expect to start to benefit from some portfolio programs based on our broader account base and ways that we will be able to, you know, leverage one product with the other to incentivize further leaning in. And so that's kind of how we think about that. And as I said, I know it's early, but we like what we're seeing in April.

Mark J. Foley: <unk> further leaning in and so that's kind of how we think about that and as I said I know, it's early but we like what we're seeing in April and I'm sure. Some of that is that the lift but I think some of that said the team again, turning their focus to broader portfolio as well.

Mark J. Foley: I'm sure some of that is the lifts, but I think some of that's the team, again, you know, turning their focus to a broader portfolio as well. In terms of, let's see, you know, Q2 and how we think about the time it takes for a new account to fully get up to speed and on board, yeah, it's probably a quarter or two.

Mark J. Foley: In terms of.

Mark J. Foley: Let's see Q2, and how we think about the time it takes for new account to fully get up to speed and onboard.

Mark J. Foley: It's probably a quarter or two there is still some that are going to want to see a duration signal with <unk> before they fully decide where that fits into their practice, even though we've soften the duration message and what we continue to hear from accounts is while duration is great onset and particularly the skin quality continue to be really important differentiators for them.

Mark J. Foley: There's still some that are gonna wanna see a duration signal with Actify before they fully decide where that fits into their practice, even though we've softened the duration message. And what we continue to hear from accounts is that, while duration is great, you know, onset and particularly skin quality continue to be really important differentiators for them. And so it's hard for me to say with certainty how those things are all gonna knit together when you think about Q2 being a stronger quarter compared to Q1.

Mark J. Foley: And so it's hard for me to say with certainty how those things are all going to knit together when you think about Q2 being a stronger quarter compared to Q1, but when we step back we have a certain account target of new accounts that we wanted to add in total accounts that we want to get to by the end of the year using similar.

Mark J. Foley: But when we step back, you know, we have a certain account target of new accounts that we wanna add and total accounts that we wanna get to by the end of the year using similar utilization metrics. And, you know, frankly, we've continued to grow the utilization per account, you know, from Q4 to Q1. And so we can continue that trend and add the new accounts, which we think are very reasonable. That's how we come up with the numbers that we feel comfortable with.

Mark J. Foley: Utilization metrics.

Mark J. Foley: Frankly, we've continued to grow the utilization per account.

Mark J. Foley: Q4 to Q1, and so we can continue that trend and add the new accounts, which we think are very reasonable that's how we come up with the numbers that we feel comfortable with.

Mark J. Foley: In terms of the broader versus deeper and how we think about adoption, I would say that, you know, it's evolving right now. I would say it's certainly a minority of our accounts that have made Daxify their leading and primary toxin, more than 50%. I think it's a good healthy number where we, you know, where we are in those accounts, we occupy a decent spot. And, you know, our goal is, as they get more familiar and more comfortable with it, that we can lean in more and continue to increase that penetration, particularly as they get more familiar. And so, again, we have some different initiatives about that, but I would say it's a small percentage of the accounts that have sort of said Daxify is our primary toxin.

Mark J. Foley: In terms of the broader versus deeper in how we think about adoption I would say that.

Mark J. Foley: It is evolving right now I'd say, it's certainly.

Mark J. Foley: A minority of our accounts that have made back defy they're leading in primary toxin more than 50% I think it's a good healthy number where we were in those accounts, we occupy a decent spot and our goal is as they get more familiar and more comfort with it that we can lean in more and continue to increase.

Mark J. Foley: That penetration, particularly as they get more familiar and so again, we have some different initiatives about that but I would say, it's a small percentage of the accounts that have sort of said <unk> as our as our primary toxin.

Stacy Ku: Okay, wonderful. And just to follow up, sounds like you are this year, 2024, thinking about maybe implementing, when you say portfolio programs, is that bundling?

Speaker Change: Okay wonderful and just to follow up it sounds like you are this year plenty plenty for thinking about may be implementing when you say portfolio programs is that is that bundling.

Mark J. Foley: That is correct. We do plan to do that this year in 2024. Okay, wonderful.

Speaker Change: That if that is correct, we do plan to do that this year in 2024.

Stacy Ku: Okay, wonderful. Thank you so much. Great. Thanks, Stacy. Thank you. The following question comes from Annabel Samimy with Stiefel. You may proceed.

Speaker Change: Okay wonderful. Thank you so much.

Annabel Eva Samimy: Great. Thanks, Stacey thank you.

Annabel Eva Samimy: The following question comes from Annabel <unk> with Stifel. You May proceed.

Annabel Eva Samimy: Hi, thanks for taking my question. Just following up on the portfolio programs, I guess... You know, in terms of the plans that you have in place right now, the coupon you treat as a rebate, are you planning on having portfolio programs as a rebates as well? And I guess what the, or rather direct savings for those accounts? And then, you know, just as we think about the portfolio, have you begun to see more filler orders from accounts that now have DAXify and vice versa? And are you starting to see that?

Annabel Eva Samimy: Hi, Thanks for taking my question just following up on that.

Annabel Eva Samimy: Portfolio programs.

Annabel Eva Samimy: I guess.

Annabel Eva Samimy: In terms of the plans that you have in place right now the couponing you treat it as.

Annabel Eva Samimy: As a rebate are you planning on having a portfolio.

Annabel Eva Samimy: Grams, as a rebate as well and I guess what was the.

Annabel Eva Samimy: Rather direct savings for those accounts.

Annabel Eva Samimy: And then.

Annabel Eva Samimy: Just as we think about the portfolio have you begun to see more filler ordering from accounts that now have jakafi and vice versa and are you starting to see that I.

Mark J. Foley: I guess account leverage now that you have a portfolio to offer rather than just one product. And then switching to therapeutics in your preview program, I was just wondering whether the injection frequency, have you noticed whether the injection frequency for these physicians? Transcripts provided by Transcription Outsourcing, LLC. Transcribed by https://otter.ai, possibly give them the comfort to try it in other movement disorder indications that they also feel very comfortable using this product. Thanks. Sorry, that was a lot of questions. That's right; I'll try and move it.

Annabel Eva Samimy: I guess account leverage now that you have a portfolio to offer them rather than.

Mark J. Foley: Just one product and then switching to therapeutics in your preview program I was just wondering.

Mark J. Foley: If the injection frequency.

Mark J. Foley: Have you noticed whether the injection frequency for these physicians.

Mark J. Foley: What changed is it still on do they still plan on.

Mark J. Foley: On injecting on a 12 week basis, and just getting better coverage for that patient. During those 12 weeks are really extending the time to the next injection because they are able to.

Mark J. Foley: And just trying to understand.

Mark J. Foley: Whether you've seen some stretching out of the second injection.

Mark J. Foley: And then finally also our physician.

Mark J. Foley: Comfortable that this is now the same technique is just more durable with Lord adverse events and does that.

Mark J. Foley: Possibly give them comfort to try and other movement disorder indications that they also feel very comfortable using this product.

Speaker Change: Alright that was a lot of questions.

Mark J. Foley: That's all right; I'll try and move through them. Thanks, Annabel. So first off on the portfolio programs; those are what we plan to roll those out going forward. So those are early; the consumer coupon that we ran, we wanted to pilot to see, hey, you know, with a consumer coupon, can we incentivize accounts to go deeper with us and offer this to a broader range of their patients, again, with this idea that once they try Daxify, particularly with our new pricing, and get exposed to the benefits of the product, that, you know, could result in stickiness. It was very well

Speaker Change: Alright, I will try to move through them. Thanks, Annabel. So first off on the portfolio of programs that we plan to roll. This out going forward. So those are early the consumer coupon that we ran we wanted to pilot to see hey, where the consumer coupon can we incentivize accounts to go deeper with us and offer this to a broader.

Mark J. Foley: Their patients again with this idea that once they tried <unk>, particularly with our new pricing and get exposed to the benefits of the product that could result from stickiness and it was very well received but since we don't have a consumer loyalty program set up and some of these other programs. The only way we could really do it was basically a consumer coupon.

Mark J. Foley: But since we don't have a consumer loyalty program set up and some of these other programs, the only way we could really do it was as, you know, basically a consumer coupon funneled through the practice that served as a rebate, which is why we had to take the full revenue reversal for that program.

Mark J. Foley: <unk> funneled through the practice that served as the rebate, which is why we had to take the full revenue reversal for that program, but it gave us good insights and learnings. So as we think about our portfolio of programs going forward there'll be a combination of some price incentives to practices to lean in with us more broadly across the portfolio.

Mark J. Foley: But it gave us good insights and learning. So as we think about our portfolio programs going forward, there will be a combination of some price incentives for practices to lean in with us more broadly across the portfolio. And then there'll be a variety of service offerings. So, you know, we've long stated that, you know, we're more focused right now on practice programs that create value for practices since we think that they're the best suited to be able to influence switch and choice on the product side of it.

Mark J. Foley: And then there'll be a variety of service offerings. So we've long stated that we're more focused right now on practice programs that create value for the practices since we think that there.

Mark J. Foley: Suited to be able to influence switch and choice on the product side of it and so we'll have a variety of other initiatives also linked to portfolio that aren't just dollars in savings they might be programs or other value added services that they can benefit from and we will start to roll those out this year and we would expect given the relationship that we.

Mark J. Foley: And so we'll have a variety of other initiatives also linked to the portfolio that aren't just dollars and savings; they might be programs or other value-added services that they can benefit from. And we will start to roll those out this year.

Mark J. Foley: And we would expect, given the relationship that we have with Daxfire RHA, that we should be able to create programs that incentivize trial and, hopefully, adoption given the relationship that we have with the other products. So we're excited and encouraged about that. Your question on the therapeutic side with regard to frequency of injections has been really interesting and, frankly, one of the benefits of running the preview program to get real world experience. Obviously, there are two camps.

Mark J. Foley: Have either with <unk> that we should be able to create programs that incentivize trial and hopefully adoption given the relationship that we have with the other products. So we're excited and encouraged about that.

Mark J. Foley: Your question on the therapeutic side with regards to frequency of injections, it's been really interesting and frankly, one of the benefits of running the preview program to get real World experience. Obviously theres two camps. There are some that are saying listen I care less about extending the duration of the treatment effect and more about making sure that within that 12 week.

Mark J. Foley: There are some that are saying, listen, I care less about extending the duration of the treatment effect and more about making sure that within that 12 week gap between retreatments, they get as much benefit as possible. So we have some that we've talked to who say, listen, most of the patients that I treat, they're a center of excellence, they drive and come a long way, they don't want to have any downtime.

Mark J. Foley: GAAP between re treatment that they get as much benefit as profitable. So we have some that we've talked to who said listen most of the patients that I treat their center of excellence, They drive and come a long way. They don't want to have any downtime. So if I can keep them on a 12 week reinjection cycle and I can give them more good days and avoid some of.

Mark J. Foley: So if I can keep them on a 12 week re-injection cycle and I can give them more good days and avoid some of the roller coaster effect that they experienced today, that's a huge win. We have others that say, hey, you know what? I'm going to start them on this, bring them back at 12 weeks, but if I see them and I can get them to 14 or 16, that's a huge win

Mark J. Foley: The roller coaster effect that they experienced today, that's a huge win we have others that say hey, you know what I'm going to start them on this springing back at 12 weeks, but if I see and I can get them to 14 or 16, that's a huge win and so it's been interesting and therapeutics I think because its a reimbursed space. Because these are debilitating conditions I think theres a little.

Mark J. Foley: And so it's been interesting in therapeutics, I think, because it's a reimbursed space because these are debilitating conditions. I think there's a little bit more of a shift towards, first, I want to just get more better days. And then if it turns out that I can extend the duration profile even better, but we feel, based on what we're hearing from them, it'll be a big win if we can just do a better job of controlling symptoms within that 12 week current timeframe. In terms of the technique, yes, the same injection technique.

Mark J. Foley: More of a shift towards first I wanted to just get more better days and then if it turns out that I can extend the duration profile, even better but we feel based on what we're hearing from them. It will be a big win if we can just do a better job of controlling symptoms within that 12 week current timeframe.

Mark J. Foley: And what's been really encouraging for us is across a range of different doses, we are seeing that we maintain a very good safety profile consistent with what we saw in the Aspen program. And we think a little bit of that speaks to the peptide formulation and the precision of the product. And so we continue to be cautiously optimistic that we're going to see the benefit of this duration profile with, again, a very good safety profile going forward. And then the last question you asked was about spontaneous use.

Mark J. Foley: In terms of the technique, yes, the same injection technique.

Mark J. Foley: Whats been really encouraging for us is across a range of different doses. We are seeing that we're maintaining a very good safety profile consistent with what we saw on the Aspen program and we think a little bit of that speaks to the peptide formulation and the precision of the product and so we continue to be cautiously optimistic that.

Mark J. Foley: We're going to see the benefit of this duration profile with again, a very good safety profile going forward and then last question you asked about spontaneous use.

Mark J. Foley: What's interesting on the commercial coverage side of it is they ultimately determine what they cover, and we have some of these commercial plans that are covering Daxify as sort of a toxin generically across. And I think, you know, from that, you know, from payer to payer, they will ultimately decide, with their, you know, coverage universe, how they are willing to reimburse the product. And so, obviously, we can only promote it for cervical dystonia. But, you know, if you look at the payer coverage universe, we do have coverage beyond just cervical dystonia in many of the commercial payer plans.

Mark J. Foley: What's interesting on the commercial coverage side of it is they.

Mark J. Foley: Ultimately determine kind of what they cover and we have some of these commercial plans that are covering docks defy as sort of a toxin generically across and I think from that from payer to payer they will ultimately decide with their.

Mark J. Foley: Coverage universe, how they are willing to reimburse the product and so obviously, we can only promote it for cervical dystonia, but if you look at the payer coverage universe, we do have coverage beyond just cervical dystonia and many of the commercial payer plans.

Annabel Eva Samimy: Okay, great. Thanks. Great. Thank you, Annabel.

Speaker Change: Okay, great. Thank you.

Annabel Eva Samimy: Great. Thanks Annabel.

Chris Shibutani: Thank you. The next question comes from Chris Shibutani with Goldman Sachs. Please proceed.

Speaker Change: Thank you. The next question comes from Chris <unk>, Tony with Goldman Sachs. You May proceed.

Chris Shibutani: Great. Thank you very much a question on aesthetics and then a question on the therapeutic side within the aesthetics market. There has been commentary about the tone of the market overall on fillers as being one that has been a little bit slower to recover or has been lagging somewhat can you comment in terms of what youre seeing.

Mark J. Foley: Can you comment in terms of what you're seeing and, in particular, with regard to whether you feel as if there is any aspect of filler fatigue in relation to toxins, just observations about the market? And on the therapeutic side, I appreciated the commentary that you gave about your launch approaches. You've talked about account numbers on the aesthetics. Can you help us as you expand from preview to a broader launch by telling us what kind of numbers of accounts you're talking about here so that we can hopefully get a sense of gauging progress?

Mark J. Foley: And in particular.

Mark J. Foley: With regard to.

Mark J. Foley: Or do you feel as if there is any aspect of filler fatigue in relation to toxins just observations about the market none of the therapeutic side I appreciated the commentary that you gave about your launch approaches.

Mark J. Foley: You've talked about account numbers on the aesthetics can you help us as you expand from preview to a broader launch what kind of numbers of accounts you are talking about here. So that we can hopefully get a sense for gauging progress and then I couldn't help but notice that you use specifically in your vocabulary when youre talking about payers that you were.

Mark J. Foley: And then I couldn't help but notice that in your vocabulary when you're talking about payers, you use specifically that you were trying to put in place a smooth switch process. Is that the focus of the strategy versus, say, new patient starts? Thank you.

Mark J. Foley: Trying to put in place a smooth switch process is that the focus of the strategy versus say new patient starts.

Speaker Change: Great. Thanks, Chris.

Mark J. Foley: So on the aesthetic side of it, in terms of, you know, what's impacting sort of the filler market and, you know, why was there observed softness in Q1? You know, it's really hard to tell because it's one quarter. Obviously, you know, some of the larger players have reported already and noticed a similar observation in Q1. I don't know if it's an economic issue where some patients maybe are saying, hey, rather than three syringes, I'm going to get two syringes. We've heard some of that.

Mark J. Foley: So on the aesthetic side of it in terms of.

Mark J. Foley: What's impacting sort of the filler market in <unk>.

Mark J. Foley: Why was there observed softness in Q1.

Mark J. Foley: It's really hard to tell because it's one quarter. Obviously some of the larger players have reported already and noticed a similar observation in Q1 I don't know if it's an economic issue where some.

Mark J. Foley: Patients may be are saying, hey, rather than three surrenders I'm going to get to surrenders, we've heard some of that.

Mark J. Foley: Or whether it's, you know, like you said, filler fatigue where, you know, people are changing sort of kind of ultimately what they want. It feels like it's more of a single quarter effect because, you know, if we look at sort of Q2, and again, I know it's early, it does feel like things are returning a little bit to the normal. I do think we had the post-Zoom effect where we saw a little bit of an artificial increase in filler volume.

Mark J. Foley: Or whether it's.

Mark J. Foley: Like you said, a pillar fatigue, where people are changing sort of kind of ultimately what they want it feels like it's more of a single quarter effect, because if we look at sort of Q2 and again I know it's early it does feel like things are returning a little bit to the normal I do think we had the zoom effect, where we saw a little bit.

Mark J. Foley: Of an artificial increase in filler volume after the whole COVID-19 lockdown being on zoom for a while people with a little bit more discretionary spend and so I think that drove a little bit more of an elevated market. I think we're now returning more to normal I have not heard from clinicians any sort of change in consumer sentiment about filler. So I think it is.

Mark J. Foley: After the whole COVID lockdown, being on Zoom for a while, people had a little bit more discretionary spend, and so I think that drove a little bit more of an elevated market. I think we're now returning more to normal.

Mark J. Foley: I've not heard from clinicians any sort of change in consumer sentiment about filler, so I think it probably had more to do with a little bit of the economics, but that seems to be abating as we move into Q2 and move to the back part of the year. On the preview side of it, in terms of the number of accounts, you know, we've said that the top 500 accounts have caught on average two injectors per account; the top 1000 injectors do about 70% of the volume.

Mark J. Foley: We had more to do with you a little bit of the economics.

Mark J. Foley: But that seems to be abating, as we move into Q2 and move to the back part of the year.

Mark J. Foley: So it's a much more concentrated market. We have a commercial organization of about 20 people that will be targeting this. And that's a mix of sales reps, market access, and medical affairs. And so we think that's going to be, you know, a pretty good balance.

Mark J. Foley: On the previews side of it in terms of the number of accounts, we've said that the top 500 accounts there's call. It on average two injectors per account top thousand injectors do about 70% of the volume. So it's a much more concentrated market.

Mark J. Foley: We have a commercial organization of about 20 people that will be targeting this and that's a mix of sales reps.

Mark J. Foley: Market access and medical affairs, and so we think thats going to be.

Mark J. Foley: Pretty good balance to your question on switch versus.

Mark J. Foley: To your question on, you know, switch versus new account, new patient, given that cervical dystonia is an orphan indication, this is mainly a switch population. So there's not a lot of new people moving in, even though there's an opportunity, certainly for new patients to come in. This is largely going to be a switch patient, which is great because it's going to be easy for both the patient and the injecting physician to know what that prior treatment cycle looked like.

Mark J. Foley: New account, new new patients given that cervical dystonia is an orphan indication. This is mainly a switch population.

Mark J. Foley: So it's it's.

Mark J. Foley: Theres not a lot of new people moving and even though there is an opportunity opportunity certainly for new patients to come in.

Mark J. Foley: This is largely going to be a switch patient, which is great because it's going to be easy for both the patient and the injecting physician to know what that prior treatment cycle look like and so any incremental benefit that you can provide either on the duration symptom control or safety is going to be very well received and these are very active community.

Mark J. Foley: And so any incremental benefit that you can provide either in duration, symptom control, or safety is going to be very well received. And these are very active communities that share information pretty readily. And so, you know, we think that since this is the first really, truly new innovation in this category in a while, it will get a fair bit of visibility within that community, but we do expect it's going to be much more of a switch patient.

Mark J. Foley: As to that share information pretty readily and so we think that since this is the real first true new innovation in this category in a while that we will get a fair bit of visibility within that community, but we do expect it's going to be much more of a switch patient now I did talk a little bit about the the phasing I do think with a switch patient and a new product they're going to start conservatively.

Mark J. Foley: On the dose they're going to want to make sure that there arent introducing any.

Mark J. Foley: Now, I talked a little bit about phasing. I do think with a switch patient and a new product, they're going to start conservatively on the dose, they're going to want to make sure that they aren't introducing any unnecessary side effects, and then they will start to dose escalate in subsequent visits. And that's why it will take them a little while to just build that confidence to be able to lean in more aggressively.

Mark J. Foley: Unnecessary side effects and then they will start to dose escalate in subsequent visits and Thats why it will take them a little while to build that confidence to be able to lean in more aggressively.

Speaker Change: Great. Thank you.

Speaker Change: Great. Thanks, Chris.

Mark J. Foley: Yes.

David A. Amsellem: The next question comes from David Amsellem with Piper Sandler. You may proceed.

Mark J. Foley: The next question comes from David <unk> with Piper Sandler You May proceed.

Mark J. Foley: Thanks, and I apologize if I missed any color here since I joined late. I wanted to ask you about competitive dynamics in both the toxin and the filler spaces. So regarding the toxin space, you have the Hugel asset that gained approval. And then as you look at the filler space, you've got Evolis coming into the market next year. And I guess my question here is how you're thinking about pricing. As you know, both categories are getting more crowded.

David A. Amsellem: Thanks and.

Mark J. Foley: I apologize if I missed any color here since I joined late wanted to ask you about <unk>.

Mark J. Foley: Competitive dynamics in both the toxin.

Mark J. Foley: The filler spaces, so regarding the toxin space you have the Hugo asset.

Mark J. Foley:

Mark J. Foley: <unk> gained approval.

Mark J. Foley: And then as you look at the solar space you've got <unk>.

Mark J. Foley: Coming into the market.

Mark J. Foley: Next year and I guess my question here is how youre thinking about <unk>.

Mark J. Foley: Pricing.

Mark J. Foley: That's number one. And then, number two, you know, at what point do you see practices, sort of the larger practices, I should say, you know, not carrying everything. You know, what you see from a lot of practices is they sort of offer, you know, essentially all of the key options as it relates to facial injectables. But at what point do they start picking and choosing more and freezing certain players out? How do you think about that going forward? Thank you.

Mark J. Foley: Both categories get more crowded.

Mark J. Foley: We're one and then number two.

Mark J. Foley: At what point do you see practices sort.

Mark J. Foley: Of the larger practices I should say.

Mark J. Foley: Not carrying.

Mark J. Foley: Everything what you see from a lot of practices to sort of offer.

Mark J. Foley: Essentially all of the key options as it relates to facial injectables and at what point do they start picking and choosing more.

Mark J. Foley: And freezing certain players out.

Mark J. Foley: How do you think about that going forward. Thank you.

Mark J. Foley: Sure, thanks, David. So, you know, listen, on the competitive dynamics, first off, you know, it's a big market that's got healthy growth. And, you know, as you've seen, different companies are finding their own place in the market; we've chosen to take an innovation strategy with the belief that, you know, we can carve out a pretty healthy part in the market by bringing performance attributes that are different from those of others.

Speaker Change: Sure. Thanks, David so on the competitive dynamics.

Mark J. Foley: First off it's a big market, that's got healthy growth and <unk> seen different companies are finding their own place in the market. We've chosen to take an innovation strategy with the belief that we can carve out a pretty healthy part in the market by bringing performance attributes that are different from the others and I do think as more.

Mark J. Foley: Our competitors come into the market to your second question practices are going to need to make some decisions about how many they carry because in the absence of a real performance benefit I think increasingly they're going to ask themselves from an inventory management standpoint.

Mark J. Foley: And I do think as more competitors come into the market, to your second question, practices are going to need to make some decisions about how many they carry because, in the absence of a real performance benefit, I think increasingly they're going to ask themselves, you know, from an inventory management standpoint, why do I need to carry all of them? Is there something that this product gives me that I can't get with others?

Mark J. Foley: Why do I need to carry all of them is there something that this product gives me that I can't get with the others.

Mark J. Foley: So as we've come in and we've learned more about <unk> in particular again, not just the duration, but the onset and skin quality, we think that we're going to be able to compete very effectively based on our performance profile that we think will resonate certainly with a reasonable subset of the market and certainly one that allows us to hit our target of blockbuster.

Mark J. Foley: And so as we've come in, and we've learned more about Daxify, in particular, not just the duration, but the onset and skin quality, we think that we're going to be able to compete very effectively, based on a performance profile that we think will resonate with a reasonable subset of the market and certainly one that allows us to hit our target of Blackwester potential in the US aesthetics market. And so, you know, we believe that that's going to be our way to win; we've adjusted our price so that we're able to offer this to our accounts, and they can offer it to their consumers at a price that is competitive. And so, you know, these practices and these patients are able to get incremental value for the dollar spent.

Mark J. Foley: Potential in the U S aesthetics market and so we believe that that's going to be our way to win we've adjusted our price. So that we're able to offer this to our accounts and they can offer to their consumers at a price that is competitive and so these practices and these patients are able to get incremental value for the dollar spend and that's sort of.

Mark J. Foley: How we think about competition at some of the newer players come in we think if anything they are likely going to compete probably more in other segments of the market.

Mark J. Foley: And that's sort of how we think about competition. And so, as some of the new players come in, you know, we think, if anything, they're likely going to compete more in other segments of the market. And because of bundling and loyalty and services, we do think that the US market is a little bit more insulated compared to some of the other international markets and should allow for a full value play across that.

Mark J. Foley: And because of bundling and loyalty and services, we do think that the U S markets, a little bit more insulated compared to some of the other international markets and should allow for a full value play across that.

Mark J. Foley: And then same on the solar side, I mean listen the RH a collection of fillers has been in the market for a long time it to that.

Mark J. Foley: And then same on the filler side. I mean, listen, the RHA collection of fillers has been in the market for a long time. It's a, you know, the Teoxane franchise is very well known, highly regarded, and it's the least modified of the fillers.

Mark J. Foley: The octane franchise is very well known and highly regarded the lease modified the fillers.

Mark J. Foley: And as a result, the performance attributes we believe it when we go in or are able to win business. We win it not on price, but we went it based on the quality of the product and so we think that's ultimately going to be our strategy and we know that there will be different ways that different companies compete but.

Mark J. Foley: And as a result, you know, the performance attributes, we believe that when we go in or are able to win business, we win it, not on price, but we win it based on the quality of the product. And so, we think that's ultimately going to be our strategy. And we know that there will be, you know, different ways that different companies compete. But To close on that on your second question, I do think that accounts will start to increasingly pick and choose, and in the absence of bringing something of differentiation, either on the services or on the product side, I think that, you know, it will be harder for them to carry all the products.

Mark J. Foley: To close out that on your second question I do think that that accounts will start to increasingly pick and choose and in the absence of bringing something of differentiation either on the services or on the product side I think that it will be it will be harder for them to carry all the products.

David A. Amsellem: If I may sneak in a follow-up. As both spaces get more crowded, do you envision outright price competition or scenario scenarios in either or both of the spaces where your hand is just gets forced on price? How do you think about that?

Speaker Change: If I may sneak in a follow up.

David A. Amsellem: As the both spaces get more crowded do you envision.

David A. Amsellem: Outright price competition or a scenario scenarios.

David A. Amsellem: Either or both of the spaces, where.

David A. Amsellem: Your hand is just just gets forced.

David A. Amsellem: On price, how do you think about that.

David A. Amsellem: I think that already exist today, David I don't I don't know that new player coming in offering perhaps more price incentives because I mean, there are competitors out there today that lean in pretty heavily on price and whether it's direct private store samples or other things like that I think you already have a pretty competitive market.

Mark J. Foley: I think that already exists today, David. I don't know that new player coming in offering perhaps more price incentives because, you know, there are competitors out there today that lean heavily on price. And whether it's direct price or samples or other things like that, I think you already have a pretty competitive market, and pricing has been pretty resilient. And again, I think it comes down to the fact that there are other things that come into this than price.

Mark J. Foley: And pricing has been pretty resilient and again I think it comes down to the fact that there are other things that come into this.

Mark J. Foley: You know, it's the product quality, it's, you know, what other services. I think we've got a pretty competitive market already. And there are definitely some players that, either as a strategy or on a quarterly basis, lean heavily on incentives that directly tie into a better deal. And, you know, the market has been pretty resilient there.

Mark J. Foley: Then price, it's the product quality.

Mark J. Foley: What other services I think we've got a pretty competitive market already in there there are definitely some players that either as a strategy or on a quarterly basis lean heavily on incentives that directly tie into a better deal and the market has been pretty resilient there.

Speaker Change: Okay, great. Thank you.

Mark J. Foley: Thanks.

Mark J. Foley: Great. Thank you. Thank you. The following question comes from Terence Flynn with Morgan Stanley. You may proceed. Hi, this is Dan on behalf of Terence. Thanks for taking our questions.

Terence C. Flynn: Thank you. The following question comes from Terence Flynn with Morgan Stanley. Please proceed.

Speaker Change: Thank you.

Mark J. Foley: Our following question comes from Terence Flynn with Morgan Stanley You May proceed.

Terence C. Flynn: Hi, This is Dan on for Terence Thanks for taking our questions just a little bit on the market and you spoke to the filler side, but any color on the toxin market.

Speaker Change: Would be helpful. Maybe just kind of what you sound <unk> and how youre thinking about over the course of this year and then just on the Opex side, maybe just a little more on kind of the savings.

Speaker Change: Pressure that youre seeing over the course of this year and just kind of how that Scott. Thank you.

Mark J. Foley: Great. Well, I'll take the first one and then flip the second one on OffX over to Toby.

Speaker Change: Great well I'll take the first one and then flip the second one on opex over to Tobi, but yes. The toxin market has been pretty resilient I think if you look back at other points in time, even when there were some economic stress around 2008, the toxin market was not impacted to the same levels that filler market and I think it has to do with a few.

Mark J. Foley: Things.

Mark J. Foley: It's a lower cost procedure.

Mark J. Foley: Once consumers get used to getting their toxin.

Mark J. Foley: Sort of the wrinkles not coming back as soon as they start to show, it's a lot more obvious where its fillers. They tend to last 12 months to 18 months, it's a little bit more of a subtle change and so at times, it's easier for them to perhaps push out treatment a little bit longer and so we continue to see the toxin market as being healthy.

Mark J. Foley: But yeah, the toxin market has been pretty resilient. I think, you know, if you look back at other points in time, even when there was some economic stress around, you know, 2008, the toxin market was not impacted to the same level as the filler market. And I think it has to do with a few things. It's, you know, it's a lower cost procedure. Once consumers get used to getting their toxin and, you know, sort of their wrinkles, not coming back as soon as they start to show, it's a lot more obvious, whereas fillers, you know, they tend to last 12 to 18 months. It's a little bit more of a subtle change.

Mark J. Foley: And so at times, it's easier for them to perhaps push out treatment a little bit longer. And so we continue to see the toxin market as being healthy. And again, we would expect that to continue to grow, certainly as all the underlying fundamentals continue to play out. And so, we think we'll continue to see the kind of high single-digit growth that we've seen historically in the toxin market.

Mark J. Foley: And again, we would expect that to continue to grow certainly as all the underlying fundamentals continue to play out and so we think we will continue to see the kind of high single digit growth that we've seen historically on the toxin market and then Toby I'll throw it over to you on the Opex savings.

Mark J. Foley: And then, Toby, I'll throw it over to you on the op-ex savings. Thanks, Mark. You know, and it's a great question.

Tobin C. Schilke: Thanks, Mark. You know, and it's a great question.

Speaker Change: Thanks Mark.

Speaker Change: It's a great question.

Toby: When we commented on the prepared remarks, we talked about non-GAAP opex from continuing operations and we noted an increase year on year.

Toby: That's partially because we took us a step up on the field force to support our aesthetics and increase obviously.

Tobin C. Schilke: You know, when we commented on the prepared remarks, we talked about non gap opex from continuing operations, and we noted an increase year on year. That's partially because we took a step up on the field force to support our aesthetics and increase, obviously, ahead of the cervical dystonia launch. So that's been offset. And when you look at it, instead of year on year, but on a sequential basis from continuing operations, excluding the impact of Opal, you can compare, I think it was $91.7 million in Q4 of non-gap OPEX excluding Opal from continuing operations to $73.6 million of non-gap OPEX in Q1 2024.

Toby: Ahead of the cervical dystonia launch so that's been offset and when you look at it.

Tobin C. Schilke: Instead of a year on year, but a sequential basis from continuing operations, excluding the impact of Opel you.

Tobin C. Schilke: You can compare I think it was 91 $7 million in Q4 of non-GAAP Opex, excluding <unk> from continuing operations to $73 6 million and non-GAAP Opex in Q1 2024.

Tobin C. Schilke: And.

Tobin C. Schilke: And, you know, the team did an analysis, and we think about 40% or so was driven by efficiency initiatives that we've had across the company to deliver that. There is some seasonality to spend in Q4 that's related to increased aesthetics activity, but we feel that the efficiency initiatives that we've put into place in the last several quarters are starting to pay dividends.

Tobin C. Schilke: The team did an analysis when we think about 40% or so was driven by efficiency initiatives that we've had across.

Tobin C. Schilke: Across the company to deliver that there is some.

Tobin C. Schilke: Seasonal seasonality to spend in Q4, that's related to increased aesthetics activity, but we feel that the.

Tobin C. Schilke: The efficiency initiatives that we've put into place in the last several quarters are starting to pay dividends.

Tobin C. Schilke: Thank you. The next question comes from Serge. From Serge Belanger with Yeadam & Co., you may proceed.

Speaker Change: Thank you.

Sir Hey: A question comes from Sir Hey.

Serge D. Belanger: I'm, sorry, I hate the longer with Needham <unk> co.

Serge D. Belanger: You May proceed.

Tobin C. Schilke: Yes.

Serge D. Belanger: Hi, good afternoon. This is Serge. Yes, Mark, the first question is about the net pricing of DAXI in the first quarter, if it changed, and whether you expect it to change over the remainder of 2024 as volumes grow. And then you also talked about, on the other side, consumer prices have been coming down and becoming more in line with other products, and was the couponing strategy to help that movement down to be comparable to your competitors.

Serge D. Belanger: Hi, Good afternoon. This is <unk>.

Mark: Yes, Mike the first question.

Serge D. Belanger: Net pricing is actually over the first quarter is it changed and whether you expect it to change over the remainder of 2024 as volumes grow and then you also talked about.

Serge D. Belanger: On the other side, the consumer prices have been coming down and becoming more in line with the other products with the couponing strategy to to help them movement down to be.

Serge D. Belanger: Comparable to your competitors.

Mark J. Foley: Thanks, Serge. On the net pricing side, listen, this was solely related to the consumer coupon. So we had to take our, you know, gross revenue of 24.1, reduce it by 2 million to 22.1 because of the value of the consumer coupon that we ran. And so, you know, net pricing going forward, we will continue to report on net pricing. Based on some of the different initiatives that we do, there could be some gross to net impacts on that. But as we said, ideally, we would structure future programs in a way that it's either more of a revenue deferral or a sales and marketing expense where possible.

Speaker Change: Thanks search on the net pricing side.

Mark J. Foley: And this was solely related to the consumer coupons. So we had to take our gross revenue of $24 one reduce it by $2 million at $22, one because of the value of the consumer coupons that we ran and so net pricing going forward. We will continue to report on net pricing based on some of the different initiatives that we do there could be some.

Mark J. Foley: Gross to net impacts on that but as we said ideally we would structure future programs.

Mark J. Foley: But this was a great one that we wanted to pilot and evaluate, and we saw the desired effect. It was very well received at the practices where we rolled it out.

Mark J. Foley: Programs in a way that it's either more of a revenue deferral or a sales and marketing expense where possible, but this was a great. One that we wanted to pilot and evaluate and we saw the desired effect that was very well received at the practices, where we rolled it out.

Mark J. Foley: And talking to them they were able to that conversion discussion with the patient with much easier.

Mark J. Foley: And that helps get more patients exposed to <unk>, which we think will create the necessary stickiness that we want over time and so that was more on the services activation more consumers in terms of consumer pricing coming down that wasn't related or connected to the consumer coupon.

Mark J. Foley: Sure.

Mark J. Foley: When we rolled out the lower price two accounts since we don't ultimately control what they charge to the consumer we were hoping that they would pass that savings along but it doesn't happen overnight you had some accounts that were happy charging a premium and wanted to stay the course, and then you had others, who sort of we're trying to figure that out but we.

Mark J. Foley: In talking to them, they were able to, you know, that conversion discussion with the patient was much easier. And that helped get more patients exposed to Daxify, which we think will create the necessary stickiness that we want over time. And so, you know, that was more about services, activation, and more consumers.

Mark J. Foley: Listen to the market, we made the price change so that they could offer taxi at a price thats in line with other toxins.

Mark J. Foley: Switch discussion or the discussion with the patient becomes much easier hey, I can give you this new peptide power toxin, it's the latest innovation in the toxin space.

Mark J. Foley: Any more and Oh by the way youre likely going to see it kick in quicker.

Mark J. Foley: Last long and you'll observe some better skin quality and that has made for a much easier switch process and so we've been encouraged by the fact that that is coming down, but thats that untethering from the consumer coupon. The consumer coupon program went out to a subset of accounts, whereas this overall price strategy, but we feel and.

Mark J. Foley: With all my visits people are saying this is just really made things easier people are loving gasify.

Mark J. Foley: This change has made it much easier to switch patients.

Mark J. Foley: Got it and then when we've conducted consume aesthetic consumer surveys.

Mark J. Foley: It's actually typically comes and last of all the toxins in terms of awareness.

Mark J. Foley: Obviously, it's the newest products. So that's not surprising but curious what you see in your own surveys and what youre doing to increase that awareness of the product to drive additional demand.

Mark J. Foley: In terms of consumer pricing coming down, that wasn't related to or connected to the consumer coupon. You know, when we rolled out the lower price to accounts, since we don't ultimately control what they charge to the consumer, we were hoping that they would pass that savings along. But, you know, it doesn't happen overnight. You have some accounts that were happy charging a premium and wanted to stay the course, and then you had others who were sort of trying to figure that out.

Speaker Change: Yes, so yes.

Speaker Change: Yes listen.

Mark J. Foley: Obviously coming into the market, where we are the first thing that we wanted to do is to make sure that we got the providers in a good spot because if we spent a lot of awareness dollars with the consumer.

Mark J. Foley: Went into accounts that either didn't offered axophyte or accounts that werent happy with the <unk> that wasn't going to create a good ROI. So that's why we spent the last two quarters really focused on re engaging these practices that already were trained on <unk> saw the promise and the benefit but given the pricing struggled with sort of patient expectations and so we thought that was first in <unk>.

Mark J. Foley: But, you know, we listened to the market. We made the price change so that they could offer Daxi at a price that's in line with other toxins, so that the switch discussion or the discussion with the patient became much easier. Hey, I can give you this new peptide-powered toxin. It's the latest innovation in the toxin space. It's not going to cost you any more. And, oh, by the way, you're likely going to see it kick in quicker, you know, last longer, and you'll observe some better skin quality.

Mark J. Foley: And that has made for a much easier switch process, and so we've been encouraged by the fact that that is coming down. But that's untethered from the consumer coupon. You know, the consumer coupon program went out to a subset of accounts, whereas this overall price strategy. But we feel, and again, with all my visits, people are saying this has just really made things easier. People are loving Daxify, and this change has made it much easier to switch patients.

Mark J. Foley: Foremost, we've been supporting the brand with some digital and social, but we'll be upping and increasing our spend there in those areas now that we have a broader user base. We have some internal kpis exactly around that brand awareness share of voice all of these things and so we understand and appreciate the need to support.

Mark J. Foley: The brand at the consumer level from an awareness standpoint, but we also think that.

Mark J. Foley: Making sure that these practices have the tools at the practice level to be able to engage.

Mark J. Foley: Customers in a discussion around something new is also really good ROI, but yes, we will increase.

Mark J. Foley: Some of our social and digital efforts to create more awareness.

Speaker Change: Thanks Mark.

Speaker Change: Great. Thanks.

Mark J. Foley: Thanks, Mark. Great. Thank you. The next question comes from Tim Lugo with William Blair. You may proceed. Hey guys, this is Lachlan on for Tim. Thanks for taking the questions.

Mark J. Foley: Got it. And then when we've conducted consumer aesthetic consumer surveys, that actually typically comes in last of all the toxins in terms of awareness. And obviously, it's the newest product. So that's not surprising, but curious what you see in your own surveys and what you're doing to increase that awareness of the product to drive additional demand. Yeah, so, um, you know, what

Mark J. Foley: The next question comes from Tim Lugo with William Blair You May proceed.

Mark J. Foley: Yeah, so, listen, obviously, coming into the market where we are, the first thing that we wanted to do was to make sure that we got the providers in a good spot. Because if we spent a lot of awareness dollars on the consumer, and they went into accounts that either didn't offer Daxify, or accounts that weren't happy with Daxify, that wasn't going to create a good ROI. So that's why we spent the last two quarters really focused on reengaging these practices that already were trained on Daxify, saw the promise and the benefit, but you know, given the pricing, struggled with sort of patient expectations.

Mark J. Foley: And so we thought that was first and foremost; we've been supporting the brand with, you know, some digital and social, but we'll be increasing and increasing our spend there in those areas. Now that we have a broader user base, we have some internal KPIs exactly around that; brand awareness, share of voice, all of these things. And so we understand and appreciate the need to support the brand at the consumer level from an awareness standpoint.

Timothy Francis Lugo: The next question comes from Tim Lugo with William Blair. You may proceed. Hey guys, this is Wakwadom Pachand, signing out.

Mark J. Foley: But we also think that, you know, making sure that these practices have the tools at the practice level to be able to engage customers in a discussion around something new is also a really good ROI. But yeah, we will increase some of our social and digital efforts to create more awareness.

Timothy Francis Lugo: Hey, guys. This is lachlan on for Tim Thanks for taking the questions I guess, one clarification to start on the market share data can you just talk about how that's calculated is that patients treated vials sold some other metric.

Mark J. Foley: And then.

Speaker Change: Actual question I was curious if you've seen any changes that.

Mark J. Foley: Use patents with Jakafi, the pricing change either in terms of how injected to using a little bit.

Mark J. Foley: The type of injectable practices that are interested in getting it or anything else you may have seen.

Mark J. Foley: Sure, so first on the market share question. So we use a third-party independent data source, QSite, which is part of GuidePoint.

Speaker Change: Sure. So first on the market share question. So we use a third party independent date.

Mark J. Foley: Data source Q site, which is.

Mark J. Foley: Part of guide point and.

Mark J. Foley: This is the market share is calculated by average patient spend per average patient spend at the practice level. So kind of if we look at the total dollars that patient spends across these practices. That's how we calculate the market share.

Mark J. Foley: And it's a good sample size, obviously, they powered it to make sure that it's accurate and reflects.

Mark J. Foley: And, you know, this is how the market share is calculated by average patient spend per average patient spend at the practice level. So kind of if we look at the total dollars that, you know, a patient spends across these practices, that's how we calculate the market share. And it's a good sample size. Obviously, they powered it to make sure that it's accurate and reflects, you know, kind of what the trends are in the market.

Mark J. Foley: What the trends are in the market.

Mark J. Foley: Terms of usage patterns on <unk> typically when an injector decides to inject a product they use that product for the different areas that they want to treat on the face and so.

Mark J. Foley: In terms of usage patterns on Daxify, you know, typically, when an injector decides to inject a product, they use that product for the different areas that they want to treat on the face. And so, you know, what we are seeing is a good mix of new accounts that are coming in and sort of experimenting with it to see where it fits in their practice, combined with existing accounts that are getting more comfortable and confident in the product and growing their share within their practices.

Mark J. Foley: What we are seeing is a good mix of a nice pipeline of new accounts that are coming in and sort of experimenting with it to see where it fits in their practice combined with existing accounts that are getting more comfortable and confident in the product that are growing their share within their practices.

Mark J. Foley: And that was reflected by again that the higher average order volume per practice that we saw in Q1 compared to Q4, and so it's going to be met and listened across any practice since since we have a smaller percentage of our accounts that have made <unk> majority share in their practice youll have some that will.

Mark J. Foley: Use it for patients that want something new or some that say hey.

Mark J. Foley: The car toxin I have isn't providing me kind of the value that I want and so there'll be some variability among practice, but on average yes.

Mark J. Foley: And, you know, that was reflected by, again, the higher average order volume per practice that we saw in Q1 compared to Q4. And so, you know, there'll be some variability among practices, but on average, they get in, they start it with a certain subset of patients, and then they continue to grow it from there.

Mark J. Foley: They get in they started with a certain subset of patients and then they continue to grow it from there.

Mark J. Foley: Okay.

Timothy Francis Lugo: Great. Thanks so much.

Speaker Change: Great. Thanks, so much.

Navann Thai: The final question comes from Navann Thai of BNP Paribas. You may proceed.

Nevada: The final question comes from Nevada tie with BNP payout that you May proceed.

Mark J. Foley: Hi, good afternoon. My first question is, will Revance increase the share of MedSpa versus Derms and Plastics, and will that impact the use of coupons and other promotions going forward? And then I had a second question on therapeutics. The CD launch came slightly earlier than expected, so was that based on the previous survey or early feedback or the company's prior preparations? Thank you.

Navann Thai: Hi, good afternoon.

Speaker Change: My first question is from results increase Michelle.

Mark J. Foley: Darren Fantastic and will that impact the use of chromosomes and although promotions going forward.

Mark J. Foley: And then I had a second question on therapeutics.

Mark J. Foley: The city launched came earlier than expected.

Mark J. Foley: Something <unk> already seen backhaul.

Mark J. Foley: Payer population. Thank you.

Mark J. Foley: Yeah.

Mark J. Foley: Sure. Thanks, Devon. I'll try and make sure I hit these right.

Speaker Change: Sure. Thanks demand I'll try and make sure I hit this right. So first in terms of our customer mix with revamps and the consumer coupon. The lines are increasingly getting blurred across med spa versus core account because you'll find for example, plastic surgeons they might own pre med spas and they are the medical derm.

Mark J. Foley: So first, in terms of our customer mix with Revance and the consumer coupon, you know, the lines are increasingly getting blurred across, you know, med spa versus core account because you'll find, for example, plastic surgeons, you know, they might own three med spas and they're the medical director there. And so is that a plastic surgery account or is it a med spa account? If you look at it, you know, our primary focus in the quarter was to double back around under those accounts that had already ordered Daxify.

Mark J. Foley: There and so is that a plastic surgery count or the med Spa count if you look at it our primary focus in the quarter was to double background to those accounts that had already ordered <unk> and so we said that we've got now 3500 ordering gasify accounts as of the end of Q1, we have a really good healthy mix of all types. We've got some.

Mark J. Foley: And so, you know, we said that we've got now 3,500 Daxify ordering accounts as of the end of Q1, we have a really good healthy mix of all types. You know, we've got some med spas, you know, really high volume med spas. We have some boutique med spas. We have plastic surgeons. We have dermatologists and, you know, we have some cosmetic physicians. So we have a good mix between all of those. You know, the consumer coupon went into a subset of accounts and represented all those different ones.

Mark J. Foley: <unk> med spas really high volume med deposits and boutique med spas, we of plastic surgeons, we are dermatologists and we have some cosmetic physicians. So we have a good mix across all of those.

Mark J. Foley: Sumer coupon went into a subset of accounts and represented all of those different ones I think universally it was appreciated because they realized that it made for a much easier switch process and a lot of these accounts to offer their patients something of value, which is always good for them as a practice to say hey, I've got something else that I can offer to you.

Mark J. Foley: I think universally it was appreciated because they realized that it made for a much easier switch process and allowed these accounts to offer their patients something of value, which is always good for them as a practice to say, hey, I've got something else that I can offer to you. Your other question on the CD side and sort of how we're tracking it, we got approval last August. We did indicate that we were going to start a preview program because we wanted these, you know, a subset of KOLs to have access to the product, to get through a few treatment cycles, to inform or go forward.

Mark J. Foley: Your other question on the CD side and sort of how we're tracking and we got approval last August.

Mark J. Foley: We did indicate that we were going to start a preview program because we wanted these.

Mark J. Foley: Subset of of Kols to have access to the product to get through a few treatment cycles to inform our go forward and that's where we sort of learned a little bit more about hey, yes incremental duration is great, but if I can get better symptom control within the 12 week treatment time frame since it was published papers out there thats a more than 80% of patients have <unk>.

Mark J. Foley: And that's where we sort of learned a little bit more about, hey, yeah, incremental duration is great, but if I can get better symptom control within the 12-week treatment timeframe since, you know, there are published papers out there that say more than 80% of patients have symptom breakthrough before they can get re-injected at week 12, that that's a big win. We also, you know, they talked a little bit about how they think about dosing and dose escalation.

Mark J. Foley: Symptom breakthrough before they can get re injected at Tal that that's a big win we also talked a little bit about how they think about dosing and dose escalation and so all of that is woven in as you point out we were very encouraged with the progress that our payer team has made I mean to have a J code to have over 200 million lives covered pushing 80.

Mark J. Foley: And so all of that has woven in. As you point out, we are very encouraged by the progress that our payer team has made. I mean, to have a J-code, to have, you know, over 200 million lives covered, and 80% of commercial plans already incorporating us into their plans is obviously, you know, a big jump compared to where companies would normally be at this stage of launch. And we do think it bodes well for the long term. So we are very encouraged, and we have high expectations for that franchise.

Navann Thai: Thank you. And maybe I can ask, as well, if you have immediate uses for the 100 million offerings?

Navann Thai: Percent of commercial plans already incorporating us into their plans as obviously.

Navann Thai: Big jump compared to where.

Navann Thai: These would normally be at this stage of launch and we do think it bodes well for the long term so.

Navann Thai: We are very encouraged and we have high expectations for that franchise.

Speaker Change: Thank you Andrew.

Navann Thai: Maybe if I can ask Kim as long as you have immediate uses tobey.

Navann Thai: The $100 million offering.

Navann Thai: Okay.

Navann Thai: I'm sorry; I missed that, Navann.

Speaker Change: I'm, sorry, I missed that Nevada.

Navann Thai: If you have immediate uses for the $100 million offering,

Speaker Change: If you have immediate uses.

Navann Thai: Hundred million offering.

Tobin C. Schilke: Oh, the proceeds that we raised, Toby, you want to hit that one? Yeah, I think when we talked about the offering, this was for

Speaker Change: Oh, the proceeds that we raised Toby do you want to hit that one.

Tobin C. Schilke: Yeah, I think when we talked about the offering, this was for general corporate purposes. And so we continue to feel good about our runway and things like that. So we took the time to give feedback on sort of where we were with various debt obligations and that it would be prudent to strengthen our balance sheet. So there wasn't there wasn't an immediate use for that other than general.

Toby: I think when we talked about the offerings for general corporate proceeds and so we continue to feel good about our.

Tobin C. Schilke: Runway and things like that so this is.

Tobin C. Schilke: We took the time given feedback on sort of where we were with various debt obligations that.

Tobin C. Schilke: Prudent to strengthen our balance sheet. So there wasn't there wasn't an immediate use for that other than general Corp.

Speaker Change: Thank you.

Speaker Change: Thanks, so much.

Tobin C. Schilke: Yeah.

Operator: Thank you. This concludes the Revance Therapeutics 2024 First Quarter Financial Results Call. Thank you for your participation. You may now disconnect your line.

Speaker Change: Thank you. This concludes the revenge therapeutics 2021st quarter financial results call. Thank you for your participation you may now disconnect your line.

Operator: Goodbye.