Evolus, Inc.

Greetings. Welcome to the Evalyst second quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, David Erickson, Vice President, Investor Relations. You may begin.

Thank you, Operator, and welcome to everyone joining us on today's call. With me today are David Modizetti, President and Chief Executive Officer, and Rui Avalar, Chief Medical Officer and Head of R&D. Our prepared remarks today will include forward-looking statements within the meaning of United States securities laws, and management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current assumptions and expectations of future events and trends, which may affect the company's business, strategy, operations, or financial performance. A detailed discussion of the risks and uncertainties that the company faces is contained in its annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Actual results may differ materially from those expressed in or implied by the forward-looking statements. The company undertakes no obligation to update or review any estimate, projection, or forward-looking statement. Additionally, today's discussion will include non-GAAP financial measures, which should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results may be found in our earnings release, which was furnished with our Form 8K filed today with the SEC, and on our investor relations website at evelis.com. Lastly, following the conclusion of today's call, a replay will be available on our website at evelis.com. And with that, I'll turn the call over to David.

We are very pleased to share with you our results for the second quarter of 2022, which reflected above-market growth, increased market share, and disciplined operating expense management. Sales grew to a record $37.2 million, and our lead sales and marketing metrics demonstrated growing brand awareness and continued strong adoption of Javeau. During the quarter, we continue to carefully manage our overhead expenses, investing the majority of incremental spending in activities to support sustained growth in the U.S. and establish our presence in Europe. And we remain in a strong cash position funded to beyond profitability. We expect 2022 to be another strong year of growth for Ebolus, even in an environment with greater macroeconomic headwinds. Based on our year-to-date performance, and our confidence in a resilient and fundamentally strong aesthetic neurotoxin market, we continue to believe we can achieve the upper end of our full year sales guidance range of 143 to 150 million. This equates to a year-over-year growth rate approaching 50%. Now I'll get into some of the details. In the second quarter, we grew total sales 42% year-over-year in an aesthetics market that continues to demonstrate strong demand. Our U.S. sales growth rate was at least double the estimated market growth rate. New account growth during the quarter was again very strong, and we added nearly 590 new customers, bringing our total account base to more than 8,100, with a reorder rate that continues to run above 70%. This expanding customer base creates a pipeline for future growth. because our experience shows that new customers typically start out with small orders. Then over time, as they gain confidence with the product and our unique co-branded marketing benefits, we see our market share expand steadily. Supporting this observation is GuidePoint Q-Site Aesthetics data that provides analysis from point of sale across more than 800 practices. This data shows that over the last 12 months, Gervaux has reached the number one or number two toxin share position within practices that have adopted our product. And while our customer base has expanded rapidly to over 8,100 accounts, we are still only selling to less than one-third of the aesthetic neurotoxin customers in the U.S. This, combined with a greatly under-penetrated toxin market, leaves room for significant opportunity in the coming years. We are continuing to see excitement for our co-branded streaming TV advertising, which is available to our largest customers. Customers earn these ads by committing a large portion of their talks and business to Juveau. During the second quarter, we completed production on a large bolus of these ads, which have recently begun airing. In the second quarter, we ran a total of 750 digital, billboard, and streaming TV marketing campaigns that generated more than 250 million media impressions. These ads serve the dual purpose of promoting our customers' businesses while continuing to build the Jouveau brand. We have now completed eight consecutive quarters of advertising through our co-branded media program, and the cumulative effect of that advertising is driving brand awareness. In fact, among the representative panel of aesthetics consumers, aided awareness of Jouveau has now reached number two in the market, ahead of both Dysport and Zeoman. and this recognition has occurred in just three short years since we first launched. Javot Brand Awareness is also continuing to drive patients into practices for treatment. Membership in our Eveless Rewards Program, of which the largest demographic is millennials and younger, grew to nearly 390,000 by the end of the quarter, up from 335,000 last quarter. Through the first half of the year, approximately 180,000 rewards have been redeemed, compared to 100,000 for the first half of 2021. This puts us on track to nearly double the number of redemptions over last year, illustrating the power of this program to motivate consumers and their loyalty to Chabot. Now, we know there's a great deal of interest in how the current economic environment might affect the growth trajectory of the toxic market and the behavior of a set of consumers. So, I'd like to take a moment to discuss some of the trends we are seeing. As you know, we stay very closely connected with our customers because we're not just selling them a product, but we're engaging in long-term relationships designed to help them grow their practices. And we have very good visibility into the engagement of consumers enrolled into our loyalty program. In the second quarter, we did not observe signs of slowing as measured by purchasing patterns across our customer base or consumer engagement in our loyalty program. Third-party data that tracks overall procedural volumes suggested a slight slowdown in growth compared to the first quarter, but still trending in line with historical averages. Since the end of the second quarter, growth trends have remained strong, and we have not seen any meaningful change in customer purchasing patterns. Additionally, our customers are not reporting any material differences in patient volumes or spending habits when it comes to neurotoxin products. We continue to believe the fundamentals of the toxic market are strong and that the low penetration rate we see today will continue to increase over time. We are also encouraged by the overall resilience of the aesthetic neurotoxic market, which has demonstrated positive annual growth over 15 years, even during the last recessionary period of 2007 through 2009. The only exception to this was in 2020 when practices were closed due to COVID. Neurotoxins are one of the most affordable aesthetic procedures, and if faced with a choice, patients are more likely to stretch out the interval between treatments than to stop getting them altogether. All of this gives us confidence that Avalos can grow at a faster pace than the toxic market and continue to gain share by leveraging our unique business model focused on the cash pay aesthetic market and targeting the millennial consumer using our cost-effective digital platform. Building on our momentum, several weeks ago we launched Switch Your Talks and Love Eveless Forever, our largest promotional campaign to date. The Switch program is a strategic investment designed to sustain our growth and drive further market share gains in 2023 and beyond. Switch is designed to simply increase your vote usage by injectors and their patients. Customers who purchase a minimum amount of GVO by the end of the third quarter will receive 60 reward certificates in the amount of $160 per new GVO consumer to be used over two consecutive treatments. This reward represents a meaningful patient discount over competitors' incentive programs, and we think it will be quite attractive to new consumers. The rollout of this program has just begun, and while early feedback has been quite positive, the results of SWITCH will unfold over the next several quarters as customers sign up and customers come in for their two treatments. Now turning to Europe. Beginning this quarter, we will begin the launch of Nuceva, initially to customers in Great Britain and Germany, which are the two largest markets in that region and represent nearly 40% of the European market. Our early efforts will focus on introducing our company and our product at local aesthetics meetings, and initial sales are expected to be modest as we build our presence. Longer term, we expect Nuseva to be an important contributor to our growth as we expand to additional European countries as well as Australia in 2023. And now I'll turn the call over to Rui Avalar for a brief update. Rui? Thank you, David.