Revance Therapeutics, Inc.

welcome to the revance therapeutics fourth quarter and full year 2023 financial results and corporate update conference call at this time all participants are in listen only mode if anyone has difficulty hearing the conference call please press star zero for operator assistance following management's prepared remarks we will hold a q a session to ask a question at that time please press star forward by one on your touch tone phone 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 on Wednesday, February 28, 2024. I would now like to turn the conference call over to Jessica Serra, Head of Investor Relations, Corporate Communications, and ESG for revance. Please go ahead.

Thank you, Operator. Joining us on the call today from revance are 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 Daxify on adoption, expectations and timing related to product adoption and reorders, our product pipeline, consumer needs, preferences, and behavior, the benefits and value to us, practices, and consumers of our products, including the efficacy, duration, and safety of our products, 2024 guidance, cash flow late given, positive adjusted EBITDA, future capital expenditures, funding our business, and capital allocation plans. Our strategic priorities, our anticipated success, our blockbuster and growth potential, our market opportunity and expectations, provider partnerships, the wind down of OPAL, our strategy, planned operations, international expansion, strategic partnerships, and commercialization plans and timing. 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 these statements include factors the company describes in the section called Risk Factors in our annual report on Form 10-K to be filed with the SEC today, February 28, 2024. RE-VANCE undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in its expectations. Also on today's call, we will present both GAAP and non-GAAP financial measures. Reconciliation of non-GAAP to GAAP measures is included in our earnings relief. With that, I will turn the call over to Mark Foley, Chief Executive Officer of Revance. Mark.

Thank you, Jessica. Good afternoon, everyone, and thank you for joining our fourth quarter and full year 2023 financial results conference call. I'll first cover our overall performance in our aesthetics and therapeutics businesses before turning the call over to Toby to review our financial results in 2024 guidance. 2023 was an important year for Revance. We realized several pivotal milestones, including the launch of Daxify in aesthetics and the FDA approval of Daxify for cervical dystonia, in addition to achieving record product revenue of $213 million of 80% year over year. From a balance sheet perspective, we ended the year in a strong financial position with $254 million in cash cash equivalents, and short-term investments. Combined with our commercial progress to date, we believe we are well positioned to deliver on our strategic priorities for 2024, which I will cover later in the call. Turning to DAXify for our aesthetics business, we generated total sales of $95 million in our first five quarters of launch, exceeding the combined sales of the last three neuromodulators to enter the market in the same launch timeframe. We also gained important real-world feedback from the early stages of our DAXify launch, which informed our updated pricing and provider engagement strategy, better positioning us for broader adoption and long-term success. As a reminder, we revised DAXify's pricing in September of last year to be more competitive and to facilitate greater trial and adoption. Since adapting our strategy, we began to see the desired impact with regards to usage, reorder rates, and customer perception, with that momentum continuing into Q1. From a sales volume perspective, Q4 vials sold were up 22% compared to Q3, and importantly, more than two-thirds of Q4 revenue came from existing accounts. Based on our current focus on existing customers, we believe this reflected deeper product adoption. We ended the year with over 3,000 Vaxify accounts, which is less than 10% of the total number of U.S. aesthetic accounts, and less than one-half of our existing account base, underscoring our significant runway for growth. Since the rollout of our new pricing and provider engagement strategy, we have focused our efforts on existing Daxify customers since these accounts have already been trained, have experience with the product, and in most cases, are RHA customers. And from a reputational and foundational perspective, we believe it's important to gain their support. Previously, we indicated that we expect this re-engagement plan to take approximately two quarters before turning our focus to new account activation in the beginning of Q2. Beyond pricing, we consistently hear from customers that Daxify is a great product and offers a compelling value proposition because of its unique peptide formulation, fast onset, long duration, and ability to enhance the skin's appearance. To that end, we recently introduced new brand messaging for Daxify which highlights the product's full range of benefits and ability to deliver an optimal overall aesthetic look. The new messaging, along with expanded sales tools and materials, was shared with our sales team at our national sales meeting in January and has been very well received. Based on feedback and in support of our new pricing strategy, we recently removed our no advertised price policy, which was implemented in the introductory phase of our product launches. However, as we move to broaden our share and brand awareness, it is important that we empower practices to market and promote the Revance product portfolio. During the fourth quarter and into Q1, we also expanded and augmented our marketing tools, marketing materials, Salesforce training, and customer education programs. We have and will continue to increase our visibility with customers and KOLs, the advisory boards, congresses, podium presence, media events, and thought leadership. Further, in February, we executed one of several planned promotional programs, a patient coupon program, which has been very well received and aligns with our goal of driving greater practice and consumer experience with Daxify. Turning to our filler business, the RHA collection continues to be vital to our aesthetics franchise and foundational to the long-term growth of Daxify. Three years into launch, the RHA collection is still the fastest-growing HA filler in the U.S., sitting at about 10% market share which was largely achieved independent of a neuromodulator. We believe RHA's success can be attributed to not only our strong execution, but more importantly, its leading innovation. RHA is designed to more closely resemble the natural hyaluronic acid found in the skin, which we believe distinguishes the collection from other competitive offerings. Further, the collection's range of utility continues to expand with new SKUs and indications, including RHA Redensity for lip lines, RHA-4 for cannula use, and more recently, RHA-3 for lip augmentation and lip fullness. The lips are the most frequently treated area for dermal fillers, and the recently approved label expansion provides us with new opportunities to train on RHA's leading innovation and injection techniques. We look forward to launching the new lip indication in Q2. In 2023, we were pleased to deliver 20% year-over-year RHA revenue growth despite softness in the U.S. filler market and while we launched DAXify and worked through our strategy changes. As we move into 2024, we look forward to continuing to drive healthy growth across both DAXify and the RHA product line through a combination of new account activation and deeper penetration while also beginning to unlock portfolio synergies. Across Daxify and RHA, we ended the year with over 7,000 aesthetic accounts, up from 5,000 one year ago. Now, let me turn to our compelling opportunity in therapeutics with the approval of our cervical dystonia indication. Due to Daxify's unique and differentiated profile, we look forward to addressing the unmet needs of patients, physicians, and payers in this category. Based on a published study in the Journal of Neurology, 88% of CD patients experienced symptom reemergence between injections with symptom recurrence happening as early as week 8. Since patients can't get reinjected until 12 weeks due to label and reimbursement restrictions, this can leave CD patients with significant treatment gaps when considering both the delayed onset of action and early wear off. Based on our clinical trial data and early preview experience, We believe that Daxify has the potential to provide patients with better symptom control along with a compelling safety profile. As toxins are the 12th most costly medical benefit drug category, payers are also motivated to find alternatives that offer both clinical value and that can lower the cost of therapy. Based on Daxify's clinical performance, file price, and the dosing used in our clinical trial, there's an opportunity for meaningful savings to payers which we believe is why we've seen such strong commercial coverage at such an early stage in our launch. Taken all together, we believe Daxify's strong efficacy, long duration, and favorable safety profile, coupled with its attractive pricing, have the potential to disrupt the current CD treatment landscape, which has remained largely unchanged for 30 years. Following FDA approval in August 2023, we subsequently launched our CD preview program to leading clinicians in order to optimize treatment outcomes for patients and to ensure smooth practice integration. To date, we have treated more than 300 patients across approximately 30 practices, which is in line with our plan. As the majority of CD patients experience symptom breakthrough, most patients treated to date in the preview program are those who are uncontrolled on their current toxin. In switching these patients to Daxify, Physicians have reported that they are using a wide range of doses in their effort to optimize treatment outcome. In addition, Daxify's safety profile continues to be encouraging even in the presence of escalating doses. To date, approximately one-third of patients have completed their first treatment cycle and are now in their second treatment cycle. As a reminder, with a new toxin, physicians tend to start patients at the lower end of the dosing range before titrating them up over subsequent treatment cycles in order to find the optimal balance between symptom control and safety. Despite being early in the dose optimization journey, when surveyed, 94% of preview physicians who have been in the program since its inception indicated that they perceived Vaxify to last longer than other toxins based on their first treatment cycle. In summary, we've been very encouraged to see real-world clinical results, including safety, efficacy, and duration, in line with those seen in our Aspen clinical program. We remain on track to initiate a targeted commercial launch mid-year, having received our permanent J code in early January. Importantly, we've also made significant progress on the payer front, already securing 25 of the top 30 plans covering over 50% of commercial lives. This impressive achievement reflects not only the team's ability to execute, but also Daxify's differentiated clinical profile and attractive economic profile for payers. Also, we recently operationalized our patient reimbursement support services to minimize potential hurdles to adoption. In addition, we have launched our patient affordability program to ensure out-of-pocket costs do not impede access to therapy. On the commercial infrastructure side, our therapeutics team will include about 40 people across sales, medical affairs, market access, and reimbursement. We believe we have the appropriate resources to target the concentrated CD physician population where 70% of patients are treated by the top 20% of physicians or about 1,000 injectors. As announced earlier today, the Therapeutics Commercial Organization will be led by Dr. David Hollander, our Chief Medical Officer, who has taken on the expanded role of Global Therapeutics Franchise Lead, reporting directly to me. I'm confident that David's deep experience in all stages of the product life cycle, in addition to building strong teams, will add significant value to our therapeutics franchise. As Preview continues to advance, we look forward to presenting two posters and abstracts on our Aspen program at the American Academy of Neurology in April. With that, I'll turn the call over to Toby to cover our fourth quarter and full year financials and our 2024 financial guidance.