Revance Therapeutics, Inc.

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 9th, 2024. I would now like to turn the conference call over to Lawrence Watts of New Street Investor Relations. Please go ahead.

Thank you, operator. 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 Vaxify 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 breakeven, 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, and market opportunity and expectations, our strategy, planned operations, and commercialization plans, including consumer offers and timing of those plans. 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 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. 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.

Mark. 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, DAXify 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. 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, Daxify net revenue was $22.1 million after a reduction of $2 million related to our consumer coupon program, which functioned like a rebate. 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. 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 toxins. 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. In the quarter, we also launched a new Daxify messaging campaign titled The Daxify Difference, Fast, Last, and the 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 markets. Consistent with prior commentary, our last two quarters were focused on existing Daxify accounts in order to re-establish confidence and a more positive relationship going forward. We believe that this focus was necessary to build the right foundation for long-term success. Now that we have concluded this phase, we expect a 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 Daxify revenue in the quarter. The higher average order size per account representing deeper penetration. Consumer end pricing 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 focus, we continued to grow our filler market share and ended Q1 with a 9.8% share up from 9.1% in Q4. 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 launched 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. As we move into Q2, we are excited to be launching RHA3 for lip augmentation and fullness, as lips are the number one filler procedure performed in the US. 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. 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 US therapeutic neurotoxin market, which is projected to grow 8% annually over the next five years. 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. Daxify 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. While toxins are the gold standard of care for cervical dystonia, patients struggle to achieve sustained symptom relief in between treatments. 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 a result, this frequently leaves patients with unmanaged symptoms that can lead to significant pain, social stigma, and the inability to drive or work. Vaxify 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 which are now on their second treatment cycle. 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 preview insights at upcoming medical meetings. 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. Also, 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 copay program for the underinsured, and a patient assistance program to ensure out-of-pocket costs do not impede access to therapy. 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 CD market size, we anticipate initial revenues will be modest. However, we remain bullish regarding Daxify's potential in the service Gold Estonia 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 Daxify 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 pleased to report that we are ahead of plan 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, and our goal of reaching positive adjusted EBITDA in 2025. With that, I'll turn the call over to Toby to cover our first quarter financials.