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What changed in Evolus, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Evolus, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+333 added−372 removedSource: 10-K (2025-03-04) vs 10-K (2024-03-07)

Top changes in Evolus, Inc.'s 2024 10-K

333 paragraphs added · 372 removed · 269 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

44 edited+9 added−32 removed98 unchanged
Biggest changeGovernment Regulation in Europe EU Regulation of Biologics In the European Economic Area, or EEA (which is composed of the 27 Member States of the EU plus Norway, Iceland and Liechtenstein), medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA. 14 Table of Contents There are two types of MAs: • The Community MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the EMA and which is valid throughout the entire territory of the EEA.
Biggest changeThere are two types of MAs: • The Community MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or 12 Table of Contents EMA. and which is valid throughout the entire territory of the EEA.
These laws that may affect our ability to operate include, but are not limited to: • The Anti-Kickback Statute, which prohibit persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging for a good or service, for which payment may be made under a federal healthcare program; • The Federal False Claims Act which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government; • The Federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • The Foreign Corrupt Practices Act (“FCPA”), which prohibits certain payments made to foreign government officials; • The Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services relating to healthcare matters; • The Federal Physician Payments Sunshine Act, and its implementing regulations, which require that certain manufacturers of drugs, medical devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report to the CMS information related to certain payments or other transfers of value made or distributed to physicians, which is defined broadly to include other healthcare providers, teaching hospitals, and ownership and investment interests held by physicians and their immediate family members; and • State and foreign law equivalents of the foregoing and state laws regarding pharmaceutical company marketing compliance, reporting and disclosure obligations.
These laws that may affect our ability to operate include, but are not limited to: • The Anti-Kickback Statute, which prohibit persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging for a good or service, for which payment may be made under a federal healthcare program; • The Federal False Claims Act which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government; • The Federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • The Foreign Corrupt Practices Act (“FCPA”), which prohibits certain payments made to foreign government officials; • The Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services relating to healthcare matters; • The Federal Physician Payments Sunshine Act, and its implementing regulations, which require that certain manufacturers of drugs, medical devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report to the Centers for Medicare & Medicaid Services, or CMS, information related to certain payments or other transfers of value made or distributed to physicians, which is defined broadly to include other healthcare providers, teaching hospitals, and ownership and investment interests held by physicians and their immediate family members; and • State and foreign law equivalents of the foregoing and state laws regarding pharmaceutical company marketing compliance, reporting and disclosure obligations.
FDA Marketing Approval of Biologics The process required by the FDA before a biological product may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies according to good laboratory practices, or GLPs, and applicable requirements for the humane use of laboratory animals or other applicable regulations; • submission to the FDA of an investigative new drug application, or IND, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed biological product for its intended use, according to the FDA’s regulations, commonly referred to as good clinical practices, or GCPs, and any additional requirements including those for the protection of human research subjects and their health and other personal information; • submission to the FDA of a BLA for marketing approval that includes substantive evidence of safety; • purity and potency from results of nonclinical testing and clinical trials; 11 Table of Contents • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity and, if applicable, the FDA’s current good tissue practices for the use of human cellular and tissue products; • potential FDA audits of the nonclinical study and clinical trial sites that generated the data in support of the BLA; and • FDA review and approval of the BLA .
FDA Marketing Approval of Biologics The process required by the FDA before a biological product may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies according to good laboratory practices, or GLPs, and applicable requirements for the humane use of laboratory animals or other applicable regulations; • submission to the FDA of an investigative new drug application, or IND, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed biological product for its intended use, according to the FDA’s regulations, commonly referred to as good clinical practices, or GCPs, and any additional requirements including those for the protection of human research subjects and their health and other personal information; • submission to the FDA of a BLA for marketing approval that includes substantive evidence of safety; • purity and potency from results of nonclinical testing and clinical trials; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity and, if applicable, the FDA’s current good tissue practices for the use of human cellular and tissue products; 9 Table of Contents • potential FDA audits of the nonclinical study and clinical trial sites that generated the data in support of the BLA; and • FDA review and approval of the BLA .
Daewoong License and Supply Agreement In 2013, we entered into the Daewoong Agreement, which has been amended from time to time, pursuant to which Daewoong agreed to manufacture and supply Jeuveau ® and grant us an exclusive license to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit Jeuveau ® for aesthetic indications in the United States, EU, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, New Zealand, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan.
Daewoong License and Supply Agreement In 2013, we entered into a License and Supply Agreement with Daewoong, the Daewoong Agreement, which has been amended from time to time, pursuant to which Daewoong agreed to manufacture and supply Jeuveau ® and grant us an exclusive license to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit Jeuveau ® for aesthetic indications in the United States, EU, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, New Zealand, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan.
The major competitive products in the United States are: Hyaluronic Acid Based Dermal Fillers • Juvéderm line of fillers, marketed by AbbVie. • Restylane line of fillers, which are marketed by Galderma. • Belotero line of fillers marketed by Merz. • RHA Line of fillers manufactured by Teoxane S.A. and marketed by Revance. • Revanesse line of fillers marketed by Prollenium Medical Technologies, Inc.
The major competitive products in the United States are: Hyaluronic Acid Based Dermal Fillers • Juvéderm line of fillers, marketed by AbbVie. • Restylane line of fillers, marketed by Galderma. • Belotero line of fillers, marketed by Merz. • RHA line of fillers, manufactured by Teoxane S.A. and marketed by Revance. • Revanesse line of fillers, marketed by Prollenium Medical Technologies, Inc.
We do not incorporate the information on or accessible through these websites into this Annual Report on Form 10-K, and you should not consider any information on, or that can be accessed through, these websites a part of this Annual Report on Form 10-K or any other filing we make with the SEC. 18 Table of Contents
We do not incorporate the information on or accessible through these websites into this Annual Report on Form 10-K, and you should not consider any information on, or that can be accessed through, these websites a part of this Annual Report on Form 10-K or any other filing we make with the SEC. 15 Table of Contents
However, we are aware that sales of aesthetic neurotoxins are historically subject to the impact of traditional seasonality in the medical aesthetic market, which generally experiences higher revenue in the second and fourth calendar quarters as compared to the first and third calendar quarters.
However, we are aware that sales of aesthetic neurotoxins and dermal fillers are historically subject to the impact of traditional seasonality in the medical aesthetic market, which generally experiences higher revenue in the second and fourth calendar quarters as compared to the first and third calendar quarters.
We believe that the medical aesthetics market and the facial injectables market are poised for consistent growth driven by a number of factors, including: • increased use by millennials and younger demographics who are increasingly seeking medical aesthetic treatments and utilizing neurotoxins as an entry point for aesthetic procedures due to their minimally invasive nature; • an aging population together with an increasing life expectancy, which is resulting in more consumers with a desire for improved appearance and well-being over a longer period of time; • rising disposable income, with the United States Bureau of Economic Analysis reporting that real disposable income in the United States increased approximately 30% from December 2013 to December 2023; • growing awareness, including through social media, utilization and acceptance of elective or minimally invasive aesthetic procedures; and • continued innovation and improved accessibility to these treatments due to an increase in the number of aesthetic practitioners who perform these procedures.
We believe that the medical aesthetics market and the facial injectables market are poised for consistent growth driven by a number of factors, including: • increased use by millennials and younger demographics who are increasingly seeking medical aesthetic treatments and utilizing neurotoxins as an entry point for aesthetic procedures due to their minimally invasive nature; • an aging population together with an increasing life expectancy, which is resulting in more consumers with a desire for improved appearance and well-being over a longer period of time; • rising disposable income, with the United States Bureau of Economic Analysis reporting that real disposable income in the United States increased approximately 29% from December 2014 to December 2024; • growing awareness, including through social media, utilization and acceptance of elective or minimally invasive aesthetic procedures; and • continued innovation and improved accessibility to these treatments due to an increase in the number of aesthetic practitioners who perform these procedures.
Symatese has 25 years of experience in manufacturing biomaterials and over a decade of experience manufacturing hyaluronic-acid based dermal fillers which have been approved in the United States, Europe and elsewhere. Symatese maintains a manufacturing facility outside Lyon, France for the production of Evolysse TM .
Symatese has 25 years of experience in manufacturing biomaterials and over a decade of experience manufacturing hyaluronic-acid based gels which have been approved in the United States, Europe and elsewhere. Symatese maintains a manufacturing facility outside Lyon, France for the production of Evolysse TM .
The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval or MA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.
The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval or MA approval. The 13 Table of Contents requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.
Other Regulation of the Healthcare Industry While we do not currently have plans for our neurotoxin product or our dermal filler product candidate to be covered by insurance or government reimbursement programs, if we were to offer reimbursable products, we could be subject to federal laws and regulations covering reimbursable products, such as the Anti-Kickback Statute, Stark Law and Physician Payment Sunshine Act.
Other Regulation of the Healthcare Industry While we do not currently have plans for our products to be covered by insurance or government reimbursement programs, if we were to offer reimbursable products, we could be subject to federal laws and regulations covering reimbursable products, such as the Anti-Kickback Statute, Stark Law and Physician Payment Sunshine Act.
Symatese License, Supply and Distribution Agreements On May 9, 2023, we entered into a License, Supply and Distribution Agreement (the “Symatese U.S.
Symatese License, Supply and Distribution Agreements On May 9, 2023, we entered into a License, Supply and Distribution Agreement, or the Symatese U.S.
Additionally, Medytox, Inc. and Galderma S.A. have each submitted a BLA to the FDA for injectable botulinum toxin type A neurotoxins. If any one of these BLAs is approved, we expect the competition in the U.S. injectable botulinum toxin market to further increase.
Additionally, Medytox, Inc. and Galderma S.A. have each submitted a Biologics License Application, or BLA, to the FDA for injectable botulinum toxin type A neurotoxins. If any one of these BLAs is approved, we expect the competition in the U.S. injectable botulinum toxin market to further increase.
We believe we have good relations with our employees. Attracting and Developing Talent 16 Table of Contents We believe that our employees are our greatest asset, and our future success largely depends upon our continued ability to attract and retain high caliber talent. Talent management is critical to our ability to execute our long-term growth strategy.
We believe we have good relations with our employees. Attracting and Developing Talent We believe that our employees are our greatest asset, and our future success largely depends upon our continued ability to attract and retain high caliber talent. Talent management is critical to our ability to execute our long-term growth strategy.
The Daewoong facility has been cleared by regulators in each jurisdiction in which Jeuveau ® is approved and is subject to continuous inspections from these regulators. Evolysse TM Symatese Aesthetics S.A.S., or Symatese, manufactures and supplies Evolysse TM for us.
The Daewoong facility has been cleared by regulators in each jurisdiction in which Jeuveau ® is approved and is subject to continuous inspections from these regulators. 6 Table of Contents Evolysse TM Symatese Aesthetics S.A.S., or Symatese, manufactures and supplies Evolysse TM for us.
We believe this facility will be sufficient to meet the foreseeable demand for 8 Table of Contents Evolysse TM . In connection with regulatory approvals for the United States and Europe, the Symatese facility will be inspected by regulators in those countries.
We believe this facility will be sufficient to meet the foreseeable demand for Evolysse TM . In connection with regulatory approvals for the United States and Europe, the Symatese facility will be inspected by regulators in those countries.
Daewoong has over 70 years of experience manufacturing pharmaceutical products and is one of the largest pharmaceutical companies in South Korea. Daewoong constructed a facility in South Korea where Jeuveau ® is produced. We believe this facility will be sufficient to meet demand for Jeuveau ® for the foreseeable future.
Ltd., or Daewoong, manufactures and supplies Jeuveau ® to us. Daewoong has over 70 years of experience manufacturing pharmaceutical products and is one of the largest pharmaceutical companies in South Korea. Daewoong constructed a facility in South Korea where Jeuveau ® is produced. We believe this facility will be sufficient to meet demand for Jeuveau ® for the foreseeable future.
These opportunities are supported by strong total rewards packages, and by programs that build connections among our employees. Compensation and Benefits We are committed to a Total Rewards strategy that complements our mission, culture, and business objectives.
These opportunities are supported by strong total rewards packages, and by programs that build connections among our employees. 14 Table of Contents Compensation and Benefits We are committed to a Total Rewards strategy that complements our mission, culture, and business objectives.
Non-Hyaluronic Acid Dermal Fillers 10 Table of Contents • Sculptra Aesthetic marketed by Galderma. • RADIESSE line of fillers marketed by Merz. A number of companies are currently developing dermal fillers for the United States market. Outside of the United States there are an even greater number of competitors with dermal filler products available.
Non-Hyaluronic Acid Dermal Fillers • Sculptra Aesthetic, marketed by Galderma. • RADIESSE line of fillers, marketed by Merz. 8 Table of Contents A number of companies are currently developing hyaluronic acid gels for the United States market. Outside of the United States there are an even greater number of competitors with hyaluronic acid gel products available.
Human Capital Resources As of December 31, 2023, we had 273 employees, all of whom were full-time in the United States, Canada and Europe, and 63% of our full-time employees were women. None of our employees are represented by labor unions or covered by collective bargaining agreements, and we have never experienced any work stoppage.
Human Capital Resources As of December 31, 2024, we had 332 employees, all of whom were full-time in the United States, Canada and Europe, and 57% of our full-time employees were women. None of our employees are represented by labor unions or covered by collective bargaining agreements, and we have never experienced any work stoppage.
Facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA. 13 Table of Contents Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: public warning letters, fines, injunctions, civil or criminal penalties, recall or seizure of products, operating restrictions, partial suspension or total shutdown of production, delays in or denial of 510(k) clearance or PMA applications for new products, challenges to existing 510(k) clearances or PMA applications, and a recommendation by the FDA to disallow a device manufacturer from entering into government contracts.
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: public warning letters, fines, injunctions, civil or criminal penalties, recall or seizure of products, operating restrictions, partial suspension or total shutdown of production, delays in or denial of 510(k) clearance or PMA applications for new products, challenges to existing 510(k) clearances or PMA applications, and a recommendation by 11 Table of Contents the FDA to disallow a device manufacturer from entering into government contracts.
All such reports are also available free of charge via EDGAR 17 Table of Contents through the SEC website at www.sec.gov.
All such reports are also available free of charge via EDGAR through the SEC website at www.sec.gov.
(“Medytox”) in the U.S. International Trade Commission related to Jeuveau ® (the “ITC Action”) and certain related matters by entering into a Settlement and License Agreement with Medytox and Allergan, which we refer to as the U.S. Settlement Agreement, and another Settlement and License Agreement with Medytox, which we refer to as the Medytox Settlement Agreement.
International Trade Commission related to Jeuveau ® and certain related matters by entering into a Settlement and License Agreement with Medytox and Allergan, which we refer to as the U.S. Settlement Agreement, and another Settlement and License Agreement with Medytox, which we refer to as the ROW Settlement Agreement. We refer to the U.S.
Agreement”) with Symatese, pursuant to which Symatese granted us an exclusive right to commercialize and distribute its five Evolysse™ dermal filler product candidates, including the products referred to as: (i) Lift; (ii) Smooth; (iii) Sculpt; (iv) Lips; and (v) Eye in the United States for use in the aesthetics and dermatological field of use.
Agreement, with Symatese, pursuant to which Symatese granted us an exclusive right to commercialize and distribute its five Evolysse™ hyaluronic acid gels product candidates, including the products referred to as: (i) Form; (ii) Smooth; (iii) Sculpt; (iv) Lips; and (v) Eye in the United States for use in the aesthetics and dermatological field of use.
Biologics, such as our neurotoxin product, and medical devices, such as our dermal filler product candidates, are subject to regulation under the FFDCA and PHS Act. In the United States, biopharmaceutical products and medical devices are subject to extensive regulation by the FDA.
Biologics, such as our neurotoxin product, and medical devices, including our hyaluronic acid gel product candidates, are subject to regulation under the FFDCA and PHS Act. In the United States, biopharmaceutical products and medical devices are subject to extensive regulation by the FDA.
Our Products and Product Candidates Our currently commercially available product and our product candidates represent two of the largest product categories within medical aesthetics, injectable neurotoxins and injectable dermal fillers, respectively.
Our Products and Product Candidates Our currently commercially available product and our product candidates represent two of the largest product categories within medical aesthetics, injectable neurotoxins and injectable hyaluronic acid gels, respectively.
On December 20, 2023, we entered into a License, Supply and Distribution Agreement (the “Symatese Europe Agreement”), pursuant to which Symatese granted to us an exclusive right to commercialize and distribute four dermal filler product candidates, which are referred to as: (i) Lift; (ii) Smooth; (iii) Sculpt and (iv) Lips (collectively, the “European Filler Products”) in 50 countries in Europe for use in the aesthetics and dermatological fields.
On December 20, 2023, we entered into a License, Supply and Distribution Agreement, or the Symatese Europe Agreement, pursuant to which Symatese granted to us an exclusive right to commercialize and distribute four hyaluronic acid gel product candidates, which are referred to as: (i) Form; (ii) Smooth; (iii) Sculpt and (iv) Lips in 50 countries in Europe for use in the aesthetics and dermatological fields.
Device manufacturers must submit to the FDA medical device reports for deaths, serious injuries, and certain malfunctions and report certain field corrections and product recalls or removals. Some manufacturers also may be subject to post-market surveillance regulations.
Device manufacturers must submit to the FDA medical device reports for deaths, serious injuries, and certain malfunctions and report certain field corrections and product recalls or removals. Some manufacturers also may be subject to post-market surveillance regulations. Facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA.
Under both agreements, Symatese will be responsible for and the sole owner of any marketing authorization and clinical trial results for the dermal filler products. Impact of Settlement Agreements 9 Table of Contents In February 2021, we settled litigation claims related to a complaint against us filed by Allergan, Inc. and Allergan Limited (together, “Allergan”) and Medytox, Inc.
Under both agreements, Symatese will be responsible for and the sole owner of any marketing authorization and clinical trial results for the hyaluronic acid gel products. 7 Table of Contents Impact of Settlement Agreements In February 2021, we settled certain litigation claims related to a complaint against us filed by Allergan, Inc. and Allergan Limited, collectively Allergan, and Medytox, Inc. in the U.S.
Evolysse TM is a line of hyaluronic acid dermal fillers which utilizes first-generation cold technology currently in regulatory development. The line includes a variety of products including mid face, nasolabial folds, lips and eyes in the United States and Europe.
Evolysse TM is a collection of injectable hyaluronic acid gels which utilize first-generation cold technology. The line includes a variety of products including mid face, nasolabial folds, lips and eyes in the United States and Europe.
The FDA may request additional information, including clinical data. Under the FFDCA, a manufacturer submits a premarket notification 90 days before introducing a device into interstate commerce, but the FDA’s review of the premarket notification can take significantly longer.
The FDA may request additional information, including clinical data. Under the FFDCA, a manufacturer submits a premarket notification 90 days before introducing a device into interstate commerce, but the FDA’s review of the premarket notification can take significantly longer. If the FDA determines that the device is substantially equivalent to the predicate device(s), the subject device may be marketed.
Most of our primary competitors are also approved to sell injectable botulinum toxin type A neurotoxins in Europe and other markets that we may enter. Dermal Fillers There are a number of dermal fillers currently offered in the United States.
Most of our primary competitors are also approved to sell injectable botulinum toxin type A neurotoxins in Europe and other markets that we may enter. Dermal Filler Market Our Evolysse™ collection of injectable hyaluronic acid gels competes in the Dermal Filler market in the United States.
Aesthetic neurotoxins and dermal fillers are the largest and two of the fastest growing segments in the rapidly expanding global aesthetics market. With their high regulatory barriers to entry, these economically resilient product segments are poised for continued growth and adoption. • Pursue an aesthetic-only strategy to enhance marketing and pricing flexibility along with improving transparency for our customers.
With their high regulatory barriers to entry, these economically resilient product segments are poised for continued growth and adoption. 5 Table of Contents • Pursue an aesthetic-only strategy to enhance marketing and pricing flexibility along with improving transparency for our customers.
We also have the right of first negotiation to obtain a license from Symatese to commercialize and distribute any new products developed using the same technology as the Evolysse™ line of dermal fillers.
Under both agreements, which we refer to collectively as the Symatese agreements, we also have the right of first negotiation to obtain a license from Symatese to commercialize and distribute any new products developed using the same technology as the Evolysse™ collection of hyaluronic acid gels.
We have built and continue to improve our platform with the goal of limiting friction and enhancing the overall experience for aesthetic practitioners and ultimately consumers. • Establish a leading medical aesthetics company with a diversified product offering by in-licensing technology, developing partnerships and potentially acquiring products. 5 Table of Contents Clinical Evidence/Regulatory Development Jeuveau ® - TRANSPARENCY: Evolus Clinical Development for Glabellar Lines Our TRANSPARENCY clinical program was a comprehensive five-study clinical development program for Jeuveau ® and was used to meet international regulatory requirements.
We have built and continue to improve our platform with the goal of limiting friction and enhancing the overall experience for aesthetic practitioners and ultimately consumers. • Establish a leading medical aesthetics company with a diversified product offering by in-licensing technology, developing partnerships and potentially acquiring products.
Within the multiple age groups that receive aesthetic neurotoxin treatments, we strategically focus our marketing efforts on the millennial segment which is the largest cohort in the United States population. Millennials are defined as individuals born between 1981 and 1996.
Within the multiple age groups that utilize our products, we strategically focus our marketing efforts on the millennial segment which is the largest cohort in the United States population. Millennials are defined as individuals born between 1981 and 1996. We believe millennials view aesthetic treatments as integral to personal health and self-care, heavily influenced by social media and the internet.
Through 2027, the total sales of professional medical aesthetic products is expected to expand by 7.5% per year to $26.8 billion. Within this market, the facial injectables market, consisting of neurotoxins and dermal fillers, is estimated to be $9.5 billion in 2023 and is expected to grow to $13.3 billion in 2027.
Through 2028, the total sales of professional medical aesthetic products is expected to expand by 7.0% per year to $21.9 billion. Within this market, the facial injectables market, consisting of neurotoxins and hyaluronic acid gels, is estimated to be $10.9 billion in 2024 and is expected to grow to $14.5 billion in 2028.
The MHRA will only register devices where the manufacturer or their United Kingdom Responsible Person has a registered place of business in the United Kingdom. By July 1, 2023, in Great Britain, all medical devices will require a UKCA (UK Conformity Assessed) mark but CE marks issued by EU notified bodies will remain valid until December 2024.
The MHRA will only register devices where the manufacturer or their United Kingdom Responsible Person has a registered place of business in the United Kingdom. As of July 1, 2023, in Great Britain, all medical devices will require a UKCA (UK Conformity Assessed) mark. UCKA marking will, however, not be recognized in the EU.
Class III devices are deemed by the FDA to pose the greatest risk, such as those for which reasonable assurance of the device’s safety and effectiveness cannot be assured solely by the general controls and special controls described above and that are life-sustaining or life-supporting.
If a manufacturer obtains a 510(k) clearance for its device and then makes a modification that could significantly affect the device’s safety or effectiveness, a new premarket notification must be submitted to the FDA. 10 Table of Contents Class III devices are deemed by the FDA to pose the greatest risk, such as those for which reasonable assurance of the device’s safety and effectiveness cannot be assured solely by the general controls and special controls described above and that are life-sustaining or life-supporting.
The rules for placing medical devices on the market in Northern Ireland, which is part of the United Kingdom, differ from those in the rest of the United Kingdom. 15 Table of Contents Regulation Outside of the United States and Europe In addition to regulations in the United States and EU, we may be subject to a variety of regulations in other jurisdictions governing manufacturing, clinical trials, commercial sales and distribution of our future products.
Regulation Outside of the United States and Europe In addition to regulations in the United States and EU, we may be subject to a variety of regulations in other jurisdictions governing manufacturing, clinical trials, commercial sales and distribution of our future products.
If the FDA determines that the device is substantially equivalent to the predicate device(s), the subject device may be 12 Table of Contents marketed. However, if the FDA makes a not substantially equivalent determination, then the device would be regulated as a Class III device, discussed below.
However, if the FDA makes a not substantially equivalent determination, then the device would be regulated as a Class III device, discussed below.
Evolysse TM Dermal Filler Pipeline The graphic below provides a summary of the current status of development of the Evolysse TM line of dermal fillers in the United States and European Union and anticipated key milestones. In the United States we are seeking a PMA with the FDA.
Regulatory Development Evolysse TM Hyaluronic Acid Gels Pipeline The graphic below provides a summary of the current status of development of the Evolysse TM collection of hyaluronic acid gels in the United States and European Union and anticipated key milestones.
Both agreements have a 15-year term from the first product that is approved under the agreement and contain unlimited automatic renewal terms of 5-years thereafter. The agreements can be terminated based upon a material breach that remains uncured or failure to meet the minimum purchase requirements.
Both Symatese agreements require us to make certain minimum purchases in order to maintain the exclusivity of our licenses. Both agreements have a 15-year term from the first product that is approved under the agreement and contain unlimited automatic renewal terms of 5-years thereafter.
We believe millennials view aesthetic treatments as integral to personal health and self-care, heavily influenced by social media and the internet. Our Strategic Differentiation The key components of our strategy are to: • Focus on the largest segments of the medical aesthetic market.
Our Strategic Differentiation The key components of our strategy are to: • Focus on the largest segments of the medical aesthetic market. Aesthetic neurotoxins and hyaluronic acid gels are the largest and two of the fastest growing segments in the rapidly expanding global aesthetics market.
Removed
Regulatory approval has been received for the Evolysse TM nasolabial fold product in Europe and the remaining three products are anticipated to be approved in late 2024. We anticipate a Premarket Approval, or PMA, applications for the first two Evolysse™ dermal filler products will be submitted to the U.S. Food and Drug Administration by mid-year 2024.
Added
In October 2024, regulatory approval was received in the European Union for four products in the Evolysse™ line: Evolysse™ Form, Evolysse™ Smooth, Evolysse™ Sculpt and Evolysse™ Lips. In February 2025, we received approval from the U.S. Food and Drug Administration, or FDA, for Evolysse™ Form and Evolysse™ Smooth injectable hyaluronic acid gels for wrinkles and folds, such as nasolabial folds.
Removed
The United States regulatory approval and commercial launch is expected in 2025 for the first two products with subsequent regulatory approval and product launches for the three remaining products in 2026 and 2027.
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We anticipate launching Evolysse™ Form and Evolysse™ Smooth in the United States in the second quarter of 2025. We also anticipate launching all four approved Evolysse™ products in Europe in the second half of 2025.
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The following chart details certain important features of our primary product lines: Product Line Status Description Treatment Approvals Estimated Market Size in 2027 Jeuveau ® Commercial Injectable botulinum toxin type A Temporary improvement in the appearance of frown lines in adults.
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We are seeking premarket approval, or PMA, with the FDA for Evolysse™ Sculpt and Evolysse™ Lips and, if approved, we expect to launch those products in the United States in 2026 and 2027, respectively.
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United States - 2019 Canada - 2018 European Union/United Kingdom/European Economic Area - 2019 Australia - 2023 Switzerland - 2023 United States* - $3.9 billion Europe** - $0.7 billion Evolysse TM Product Candidate in Regulatory Development Portfolio of injectable hyaluronic-acid based dermal fillers.
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The following chart details certain important features of our primary product lines: 4 Table of Contents Product Line Status Description Treatment Approvals Estimated Market Size in 2028 Jeuveau ® Commercial Injectable botulinum toxin type A Temporary improvement in the appearance of frown lines in adults United States - 2019 Canada - 2018 European Union/United Kingdom/European Economic Area - 2019 Australia - 2023 Switzerland - 2023 United States* - $4.3 billion Europe** - $1.0 billion Evolysse TM Launching in 2025 Portfolio of injectable hyaluronic acids Improvement of moderate to severe nasolabial folds facial wrinkles, mid face volume, lip fullness and infraorbital hollow correction European Union - 2024 (4 products) United States - 2025 (2 products) United States* - $1.8 billion Europe** - $1.0 billion *Source: Medical Insight’s The Global Aesthetic Market Study ** Source: Clarivate Aesthetic Injectables Market Insights The Medical Aesthetics Market Opportunity According to Medical Insights, in 2024, total sales of professional medical aesthetic products were estimated to be $17.1 billion globally.
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Improvement of moderate to severe nasolabial folds facial wrinkles, mid face volume, lip fullness and infraorbital hollow correction.
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In the United States we obtained FDA approval of Evolysse™ Form and Evolysse™ Smooth in February 2025 and we are seeking a PMA approval for Evolysse™ Sculpt and Evolysse™ Lips. In the European Union we obtained a CE mark for the Evolysse TM collection of hyaluronic acid gels in December 2024. Manufacturing Jeuveau ® Daewoong Pharmaceuticals Co.
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Europe - Anticipated Late 2024 United States - Anticipated 2025 United States* - $2.2 billion Europe** - $1.6 billion 4 Table of Contents *Source: Medical Insight’s The Global Aesthetic Market Study ** Source: Clarivate Aesthetic Injectables Market Insights The Medical Aesthetics Market Opportunity According to Medical Insights, in 2023, total sales of professional medical aesthetic products were estimated to be $19.7 billion globally.
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The agreements can be terminated based upon a material breach that remains uncured or failure to meet the minimum purchase requirements.
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The TRANSPARENCY program included three Phase III studies titled EV-001, EV-002 and EVB-003. Treatment of the Glabellar lines was based on a 4-point photonumeric Glabellar Line Scale, or GLS, where 0=no lines, 1=mild lines, 2=moderate lines and 3=severe lines. U.S. Phase III Clinical Trials – Composite End Point Versus Placebo The two identical U.S.
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Settlement Agreement and the ROW Settlement Agreement collectively as the Medytox Settlement Agreements. In the first quarter of 2022, we made our second cash payment of $15.0 million, and in the first quarter of 2023, we completed our final cash payment of $5.0 million .
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Phase III studies, EV-001 and EV-002, enrolled a combined 654 adults who had moderate to severe glabellar lines at maximum frown. Subjects were randomly assigned in a 3:1 ratio to receive a single treatment of either Jeuveau ® or placebo. The primary efficacy endpoint was defined as the proportion of subjects classified as responders on Day 30.
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Government Regulation in Europe EU Regulation of Biologics In the European Economic Area, or EEA (which is composed of the 27 Member States of the EU plus Norway, Iceland and Liechtenstein), medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA.
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A subject was considered a responder only if both the investigator and the subject independently agreed that there was a 2 point improvement or greater on the GLS from Day 0 to Day 30 at maximum frown. This type of endpoint where both the investigator and subject must agree is known as a composite endpoint. Both of the U.S.
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The rules for placing medical devices on the market in Northern Ireland, which is part of the United Kingdom, differ from those in the rest of the United Kingdom.
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Phase III studies met the primary endpoint of superiority over placebo.
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The percentages of responders in the intent to treat population were: • EV-001: 1.2% placebo, 67.5% Jeuveau ® , with an absolute difference between the groups of 66.3%, 95% CI (59.0, 72.4) • EV-002: 1.3% placebo, 70.4% Jeuveau ® , with an absolute difference between the groups of 69.1%, 95% CI (61.5, 75.1) EU Phase III Clinical Trials – Head-to-Head Comparison of Jeuveau ® , Botox and Placebo The EVB-003 study was the third Phase III safety and efficacy study in the TRANSPARENCY Program and compared the efficacy of Jeuveau ® , Botox and Placebo.
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The study was conducted in Europe and Canada and enrolled 540 adults who (i) the investigator assessed to have moderate to severe glabellar lines and (ii) who felt their glabellar lines had an important psychological impact, such as on their mood, anxiety or depressive symptoms.
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Subjects were randomly assigned in a 5:5:1 ratio to receive a single treatment of 20 units of Jeuveau ® , 20 units of BOTOX or placebo. The primary efficacy endpoint was defined as the proportion of subjects classified as responders on Day 30.
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A responder was a subject with a GLS score of 0 or 1, as assessed by the investigator at maximum frown. The primary analysis of the primary efficacy endpoint in the EVB-003 study showed the superiority of Jeuveau ® over placebo, and established non-inferiority of Jeuveau ® to BOTOX.
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The percentages of responders for the primary efficacy endpoint were: • 4.2% in the placebo group, 95% CI (0.0, 9.8); • 82.8% in the BOTOX group, 95% CI (78.1, 87.5); and • 87.2% in the Jeuveau ® group, 95% CI (83.0, 91.5).
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A confidence interval, or CI, is a range of values in which, statistically, there is a specified level of confidence where the result lies.
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As an example, in the results above for this Phase III study, the results indicate that there is a 95% level of confidence that the responder rate for placebo was between 0.0% and 9.8%, which we express as: 95% CI (0.0, 9.8).
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The absolute differences between the treatment groups were: • 83.1% between Jeuveau ® and placebo groups, 95% CI (70.3, 89.4), (p ® was superior to placebo; and • 4.4% between Jeuveau ® and BOTOX groups, 95% CI (-1.9, 10.8), with non‑inferiority of Jeuveau ® versus BOTOX concluded based on the lower bound of the 95% CI for the absolute difference exceeding -10.0%. 6 Table of Contents EU Phase III Primary Endpoint - Responder Rates at Maximum Frown on Day 30 (GLS = 0 or 1) by Investigator Assessment EU Phase III Primary Endpoint - Non-Inferiority, at Maximum Frown on Day 30 by Investigator Assessment EU Phase III Trial - Select Secondary Endpoints *P-Value Placebo vs Jeuveau ® TRANSPARENCY Safety Evaluations Safety was studied across all five studies that made up the TRANSPARENCY Clinical Program.
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Jeuveau ® was relatively well tolerated with no drug related serious adverse events, or SAEs. Most adverse events were mild and the labeling information for Jeuveau ® lists the most common adverse reactions as headache (9.3%), eyelid ptosis (2.0%), upper respiratory tract infections (3%) and increase white blood cell count (1%).
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In the European Union we are seeking a CE mark for the Evolysse TM line of dermal fillers. 7 Table of Contents Other Clinical Evaluations Phase II “Extra-Strength” Jeuveau ® Clinical Trial In November 2021, we announced the initiation of a Phase II clinical trial designed to investigate a higher strength dose of Jeuveau ® in the glabellar lines.
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This planned glabellar line study is a controlled, randomized, prospective, double blind, three-arm trial following patients out to a maximum of 12 months. Three-arms will be enrolled: the currently approved 20 units of BOTOX and 20 units of Jeuveau ® compared to 40 units of “extra-strength” Jeuveau ® .
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In January 2023, we announced positive interim results from the Phase II clinical trial.
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The interim data analysis of the “extra-strength” formulation of Jeuveau ® demonstrated a median duration of at least 26 weeks based on the time for patients to return to their original glabellar line scale score (baseline) and the duration of at least one point improvement on the same scale.
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The safety results included 33 adverse events, 88% of which rated as mild and 12% of which rated at moderate. There were no severe or serious adverse events observed in the safety results.
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In June 2023, we announced the successful completion of the Phase II clinical trial and in November 2023, we presented the final results of the “extra-strength” clinical trial.
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The clinical trial data showed that the “extra-strength” formulation of Jeuveau ® had a similar safety profile to the controls and demonstrated a median duration of at least 26 weeks based on the time for patients to return to baseline after treatment. Manufacturing Jeuveau ® Daewoong Pharmaceuticals Co. Ltd., or Daewoong, manufactures and supplies Jeuveau ® to us.
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We also have the right of first negotiation to obtain a license from Symatese to commercialize and distribute certain other new products developed using the same technology as the European Filler Products. Regulatory approval has been received for the Evolysse™ nasolabial fold product in Europe and the remaining three products are anticipated to be approved in late 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo date, we have invested substantially all of our efforts and financial resources in the clinical development, regulatory approval, and commercial launch of Jeuveau ® , which is currently our only commercially available product. We began selling Jeuveau ® in the United States in May 2019 and through a distribution partner in Canada in October 2019.
Biggest changeRisks Related to Our Business and Strategy We have incurred significant losses since our inception. We are a global performance beauty company with a history of significant losses. To date, we have invested substantially all of our efforts and financial resources in the clinical development, regulatory approval, and commercial launch of Jeuveau ® and Evolysse™.
These include the following provisions: • permit our Board of Directors to issue shares of preferred stock, with any rights, preferences and privileges as they may designate, without stockholder approval, which could be used to dilute the ownership of a hostile bidder significantly; • provide that the authorized number of directors may be changed only by resolution of our Board of Directors and that a director may only be removed for cause by the affirmative vote of the holders of at least 66 2/3% of our voting stock; • provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; • divide our Board of Directors into three classes, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our Board of Directors; • require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; • provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice, which may discourage or deter a potential 43 Table of Contents acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our company; • prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; and • provide that special meetings of our stockholders may be called only by the chairman of the Board of Directors, our Chief Executive Officer or by our Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors, which may delay the ability of our stockholders to force consideration by our company of a take-over proposal or to take certain corporate actions, including the removal of directors.
These include the following provisions: • permit our Board of Directors to issue shares of preferred stock, with any rights, preferences and privileges as they may designate, without stockholder approval, which could be used to dilute the ownership of a hostile bidder significantly; • provide that the authorized number of directors may be changed only by resolution of our Board of Directors and that a director may only be removed for cause by the affirmative vote of the holders of at least 66 2/3% of our voting stock; • provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; • divide our Board of Directors into three classes, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our Board of Directors; • require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; • provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our company; • prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; and • provide that special meetings of our stockholders may be called only by the chairman of the Board of Directors, our Chief Executive Officer or by our Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors, which may delay the ability of our stockholders to force consideration by our company of a take-over proposal or to take certain corporate actions, including the removal of directors.
Jeuveau ® or any future products may cause or contribute to adverse medical events that we are required to report to regulatory agencies and if we fail to do so, we could be subject to sanctions that would materially harm our business. Some participants in our clinical trials have reported adverse events after being treated with Jeuveau ® .
Our products or any future products may cause or contribute to adverse medical events that we are required to report to regulatory agencies and if we fail to do so, we could be subject to sanctions that would materially harm our business. Some participants in our clinical trials have reported adverse events after being treated with our products.
In addition, regulatory authorities outside the United States may impose similar fines, penalties or sanctions. Customers may also misuse Jeuveau ® or any future product we offer or use improper techniques, potentially leading to adverse results, side effects or injury, which may lead to product liability claims.
In addition, regulatory authorities outside the United States may impose similar fines, penalties or sanctions. Customers may also misuse Jeuveau ® , Evolysse™, or any future product we offer or use improper techniques, potentially leading to adverse results, side effects or injury, which may lead to product liability claims.
Defense of such a claim would require dedicated time and resources, which time and resources could otherwise be used by us toward the maintenance of our own intellectual property and the development and commercialization of Jeuveau ® and any of our future product candidates or by any of our current or future licensors for operational upkeep and manufacturing of our products.
Defense of such a claim would require dedicated time and resources, which time and resources could otherwise be used by us toward the maintenance of our own intellectual property and the development and commercialization of our products and any of our future product candidates or by any of our current or future licensors for operational upkeep and manufacturing of our products.
We are subject to extensive, complex, costly and evolving regulation by federal and state governmental authorities in the United States, the EU, Canada and other countries, principally by the FDA, the U.S. Drug Enforcement Administration, the Centers for Disease Control and Prevention, the EMA and other similar regulatory authorities.
We are subject to extensive, complex, costly and evolving regulation by federal and state governmental authorities in the United States, the EU, Canada, Australia and other countries, principally by the FDA, the U.S. Drug Enforcement Administration, the Centers for Disease Control and Prevention, the EMA and other similar regulatory authorities.
If we, our products or the manufacturing facilities for our products fail to comply with applicable regulatory requirements, a regulatory agency may: • impose restrictions on the marketing or manufacturing of the product, suspend or withdraw product approvals or revoke necessary licenses; • issue warning letters, show cause notices or untitled letters describing alleged violations, which may be publicly available; • mandate modifications to promotional materials or require us to provide corrective information to aesthetic practitioners; • require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance; • commence criminal investigations and prosecutions; • impose injunctions; • impose other civil or criminal penalties; • suspend any ongoing clinical trials; • delay or refuse to approve pending applications or supplements to approved applications filed by us; • refuse to permit drugs or active ingredients to be imported or exported; • suspend or impose restrictions on operations, including costly new manufacturing requirements; or • seize or detain products or require us to initiate a product recall.
If we, our products or the manufacturing facilities for our products fail to comply with applicable regulatory requirements, a regulatory agency may: • impose restrictions on the marketing or manufacturing of the product, suspend or withdraw product approvals or revoke necessary licenses; • issue warning letters, show cause notices or untitled letters describing alleged violations, which may be publicly available; • mandate modifications to promotional materials or require us to provide corrective information to aesthetic practitioners; • require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance; • commence criminal investigations and prosecutions; • impose injunctions; • impose other civil or criminal penalties; 33 Table of Contents • suspend any ongoing clinical trials; • delay or refuse to approve pending applications or supplements to approved applications filed by us; • refuse to permit drugs or active ingredients to be imported or exported; • suspend or impose restrictions on operations, including costly new manufacturing requirements; or • seize or detain products or require us to initiate a product recall.
Additionally, if Medytox fails to comply with the terms of the Medytox Settlement Agreement and comply with the covenants and agreements under the Medytox Settlement Agreement, it could materially and adversely affect our ability to generate revenue from Jeuveau ® , to carry out our business, and to continue as a going concern.
Additionally, if Medytox fails to comply with the terms of the Medytox Settlement Agreements and comply with the covenants and agreements under the Medytox Settlement Agreements, it could materially and adversely affect our ability to generate revenue from Jeuveau ® , to carry out our business, and to continue as a going concern.
If we fail to attract and keep senior management and key personnel, we may be unable to market and sell Jeuveau ® successfully, or any future products we develop. Our success depends in part on our continued ability to attract, retain and motivate highly qualified management.
If we fail to attract and keep senior management and key personnel, we may be unable to market and sell our products successfully, or any future products we develop. Our success depends in part on our continued ability to attract, retain and motivate highly qualified management.
We are reliant on Symatese to achieve regulatory approval for the Evolysse™ product line in the United States and Europe. Failure to obtain approval or obtain approval on our estimated time frame for the Evolysse™ product line would negatively affect our ability to sell these products.
We are reliant on Symatese to achieve and maintain regulatory approval for the Evolysse™ product line in the United States and Europe. Failure to obtain approval, maintain approval, or obtain approval on our estimated time frame for the Evolysse™ product line would negatively affect our ability to sell these products.
If we fail to obtain regulatory approvals in foreign jurisdictions for Jeuveau ® or any future product candidates, we will be unable to market our products outside of the United States.
If we fail to obtain regulatory approvals in foreign jurisdictions for our products or any future product candidates, we will be unable to market our products outside of the United States.
Larger competitors could seek to prevent or delay our commercialization efforts via costly litigation which can be lengthy and expensive and serve to distract our management team’s attention. We could face competition from other sources as well, including academic 23 Table of Contents institutions, governmental agencies and public and private research institutions.
Larger competitors could seek to prevent or delay our commercialization efforts via costly litigation which can be lengthy and expensive and serve to distract our management team’s attention. We could face competition from other sources as well, including academic 16 Table of Contents institutions, governmental agencies and public and private research institutions.
In either case, such a license may not be available on commercially reasonable terms or at all. In addition to claims of patent infringement, third parties may bring claims against us asserting misappropriation of proprietary technology or other information in the development, manufacture and commercialization of Jeuveau ® or any of our future product candidates.
In either case, such a license may not be available on commercially reasonable terms or at all. In addition to claims of patent infringement, third parties may bring claims against us asserting misappropriation of proprietary technology or other information in the development, manufacture and commercialization of our products or any of our future product candidates.
Agreement or the Symatese Europe Agreement; • adverse developments in the regulatory approval process for Evolysse™; • the FDA or other U.S. or foreign regulatory or legal actions or changes affecting us or our industry; • adverse developments concerning our manufacturer or any future strategic partnerships; • adverse developments affecting our compliance with the Medytox Settlement Agreement; • adverse developments concerning litigation pending against us; • introductions and announcements of new technologies and products by us, any commercialization partners or our competitors, and the timing of these introductions and announcements; • success or failure of competitive products or medical aesthetic products generally; • announcements of results of clinical trials or regulatory approval or disapproval of product candidates; • unanticipated safety concerns related to the use of Jeuveau ® or any of our future products; • changes in the structure of healthcare payment systems; • announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, new product approvals and introductions, joint ventures or capital commitments; • overall financial market conditions for the pharmaceutical and biopharmaceutical sectors and issuance of securities analysts’ reports or recommendations; • rumors and market speculation involving us or other companies in our industry; • short selling of our common stock or the publication of opinions regarding our business prospects in a manner that is designed to create negative market momentum; • sales of substantial amounts of our stock by Medytox and Daewoong or other significant stockholders or our insiders, or the expectation that such sales might occur; • news reports relating to trends, concerns and other issues in medical aesthetics market or the pharmaceutical or biopharmaceutical industry; • operating and stock performance of other companies that investors deem comparable to us and overall performance of the equity markets; • additions or departures of key personnel, including our Chief Executive Officer, Chief Financial Officer, Chief Medical Officer and Chief Marketing Officer; • intellectual property, product liability or other litigation against us, our manufacturer or other parties on which we rely or litigation against our general industry; • changes in our capital structure, such as future issuances of securities and the incurrence of additional debt; • changes in accounting standards, policies, guidelines, interpretations or principles; • economic conditions in the markets in which we operate, including those related to COVID-19 and ongoing geopolitical conflicts; and • other factors described in this “Risk Factors” section.
Agreement or the Symatese Europe Agreement; • adverse developments in the regulatory approval process for Evolysse™; • the FDA or other U.S. or foreign regulatory or legal actions or changes affecting us or our industry; • adverse developments concerning our manufacturer or any future strategic partnerships; • adverse developments affecting our compliance with the Medytox Settlement Agreements; • adverse developments concerning litigation pending against us; • introductions and announcements of new technologies and products by us, any commercialization partners or our competitors, and the timing of these introductions and announcements; • success or failure of competitive products or medical aesthetic products generally; 37 Table of Contents • announcements of results of clinical trials or regulatory approval or disapproval of product candidates; • unanticipated safety concerns related to the use of Jeuveau ® or any of our future products; • changes in the structure of healthcare payment systems; • announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, new product approvals and introductions, joint ventures or capital commitments; • overall financial market conditions for the pharmaceutical and biopharmaceutical sectors and issuance of securities analysts’ reports or recommendations; • rumors and market speculation involving us or other companies in our industry; • short selling of our common stock or the publication of opinions regarding our business prospects in a manner that is designed to create negative market momentum; • sales of substantial amounts of our stock by significant stockholders or our insiders, or the expectation that such sales might occur; • news reports relating to trends, concerns and other issues in medical aesthetics market or the pharmaceutical or biopharmaceutical industry; • operating and stock performance of other companies that investors deem comparable to us and overall performance of the equity markets; • additions or departures of key personnel, including our Chief Executive Officer, Chief Financial Officer, Chief Medical Officer and Chief Marketing Officer; • intellectual property, product liability or other litigation against us, our manufacturer or other parties on which we rely or litigation against our general industry; • changes in our capital structure, such as future issuances of securities and the incurrence of additional debt; • changes in accounting standards, policies, guidelines, interpretations or principles; • economic conditions in the markets in which we operate and ongoing geopolitical conflicts; and • other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, some of which are beyond our control, including: • changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance; • the public’s reaction to our earnings releases, other public announcements and filings with the SEC or those of companies that are perceived to be similar to us; • variations in our financial results or those of companies that are perceived to be similar to us; 41 Table of Contents • any termination or loss of rights under the Daewoong Agreement, the Symatese U.S.
The market price for our common stock may be influenced by many factors, some of which are beyond our control, including: • changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance; • the public’s reaction to our earnings releases, other public announcements and filings with the SEC or those of companies that are perceived to be similar to us; • variations in our financial results or those of companies that are perceived to be similar to us; • any termination or loss of rights under the Daewoong Agreement, the Symatese U.S.
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected. 46 Table of Contents
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected. 42 Table of Contents
Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that Jeuveau ® or any future product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.
Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our products or any future product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.
If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of Jeuveau ® or any future product candidates, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtain a license under the applicable patents or until such patents expire.
If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our products or any future product candidates, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtain a license under the applicable patents or until such patents expire.
If Medytox were to breach the Medytox Settlement Agreement and rescind this filing and the Korean court issued a ruling against Daewoong, our supply of Jeuveau ® could be hindered. We would also be required to engage in costly and time-consuming litigation in order to enforce our rights under the Medytox Settlement Agreement.
If Medytox were to breach the Medytox Settlement Agreements and rescind this filing and the Korean court issued a ruling against Daewoong, our supply of Jeuveau ® could be hindered. We would also be required to engage in costly and time-consuming litigation in order to enforce our rights under the Medytox Settlement Agreements.
Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to consumers, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally.
Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to consumers, the potential of competing products, the 26 Table of Contents existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally.
Additionally, as a result of the royalty payments that we are required to pay under the Medytox Settlement Agreement, we may not be able to discount Jeuveau ® to the extent that we previously provided discounts to customers without impacting our gross profit margins.
Additionally, as a result of the royalty payments that we are required to pay under the Medytox Settlement Agreements, we may not be able to discount Jeuveau ® to the extent that we previously provided discounts to customers without impacting our gross profit margins.
Our success will also depend our ability to create compelling marketing programs, training of our customers and ability to overcome any biases aesthetic practitioners or consumers may have toward the use, safety and efficacy of existing products 24 Table of Contents over our products.
Our success will also depend our ability to create compelling marketing programs, training of our customers and ability to 17 Table of Contents overcome any biases aesthetic practitioners or consumers may have toward the use, safety and efficacy of existing products over our products.
For example, as required by the Medytox Settlement Agreement, in February 2021 Medytox filed a document with the Korean court that its litigation with Daewoong would not affect our right to have Jeuveau ® manufactured by Daewoong or exported to us.
For example, as required by the Medytox Settlement Agreements, in February 2021 Medytox filed a document with the Korean court that its litigation with Daewoong would not affect our right to have Jeuveau ® manufactured by Daewoong or exported to us.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. If we become the target of such an investigation or prosecution based on our marketing and promotional practices, we could face similar sanctions, which would materially harm our business.
The federal government has levied large civil and criminal fines against companies for 22 Table of Contents alleged improper promotion and has enjoined several companies from engaging in off-label promotion. If we become the target of such an investigation or prosecution based on our marketing and promotional practices, we could face similar sanctions, which would materially harm our business.
We face risks in building and managing a sales organization whether internally or by utilizing third parties, including our 28 Table of Contents ability to retain and incentivize qualified individuals, provide adequate training to sales and marketing personnel, generate sufficient sales leads, effectively manage a geographically dispersed sales and marketing team, adequately provide complementary products to be offered by sales personnel, which may otherwise put us at a competitive disadvantage relative to companies with more extensive product lines, and handle any unforeseen costs and expenses.
We face risks in building and managing a sales organization whether internally or by utilizing third parties, including our ability to retain and incentivize qualified individuals, provide adequate training to sales and marketing personnel, generate sufficient sales leads, effectively manage a geographically dispersed sales and marketing team, adequately provide complementary products to be offered by sales personnel, which may otherwise put us at a competitive disadvantage relative to companies with more extensive product lines, and handle any unforeseen costs and expenses.
Our partners’ ability to perform their obligations under their respective agreements is dependent on their operational and financial health, which 32 Table of Contents could be negatively impacted by several factors, including changes in the economic, political and legislative conditions in their home countries and the broader region in general and the ability of our partners to continue to successfully attract customers and compete in its market.
Our partners’ ability to perform their obligations under their respective agreements is dependent on their operational and financial health, which could be negatively impacted by several factors, including changes in the economic, political and legislative conditions in their home countries and the broader region in general and the ability of our partners to continue to successfully attract customers and compete in its market.
We are reliant on our digital technology, including our Evolus Practice App, which allows customers to open a new account, order Jeuveau ® , pay invoices and engage with our customer experience team and medical affairs representatives.
We are reliant on our digital technology, including our Evolus Practice App, which allows customers to open a new account, order products, pay invoices and engage with our customer experience team and medical affairs representatives.
A severe or prolonged economic downturn, instability or crises affecting banks or other financial institutions, or inflation in consumer prices, as we are currently experiencing, could result in a variety of risks to our business, including a decline in the discretionary spending of our target consumer population, which could lead to a weakened demand for Jeuveau ® , Evolysse™, or any future product candidates.
A severe or prolonged economic downturn, instability or crises affecting banks or other financial institutions, or inflation in consumer prices, as we are currently experiencing, could result in a variety of risks to our business, including a decline in the discretionary spending of our target consumer population, which could lead to a weakened demand for our products, or any future product candidates.
We and our licensors cannot eliminate the risk of contamination, which could cause an interruption of any of our 30 Table of Contents licensors’ manufacturing processes, our commercialization efforts, business operations and environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, manufacture, storage, handling and disposal of these materials and specified waste products.
We and our licensors cannot eliminate the risk of contamination, which could cause an interruption of any of our licensors’ manufacturing processes, our commercialization efforts, business operations and environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, manufacture, storage, handling and disposal of these materials and specified waste products.
Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be limited.
Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes, such as research tax credits, and Section 163(j) interest expense carryforwards, to offset its post-change income may be limited.
Only the manufacturing process for botulinum toxin can be patented, for which Daewoong has obtained a U.S. patent. Our trade secrets and other confidential proprietary information and those of our licensors could be disclosed or competitors could otherwise gain access to our trade secrets or independently develop substantially equivalent 34 Table of Contents information and techniques.
Only the manufacturing process for botulinum toxin can be patented, for which Daewoong has obtained a U.S. patent. Our trade secrets and other confidential proprietary information and those of our licensors could be disclosed or competitors could otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
Upon effectiveness of such registration statements, any shares subsequently issued under such plans will be eligible for sale in the public market, except to the extent that they are restricted by the contractual arrangements discussed above and subject to compliance with Rule 144 in the case of our affiliates.
Upon effectiveness of such registration statements, any shares subsequently issued under such plans will be eligible for sale in the public market, except to the extent that they are restricted by the contractual arrangements discussed above and subject to compliance with Rule 144 in the case of our 38 Table of Contents affiliates.
Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims could prevent or inhibit the commercialization of Jeuveau ® , Evolysse™, or any future products that we develop. We currently carry product liability insurance covering our clinical trials.
Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to 23 Table of Contents protect against potential product liability claims could prevent or inhibit the commercialization of Jeuveau ® , Evolysse™, or any future products that we develop. We currently carry product liability insurance covering our clinical trials.
Many of our potential competitors, including AbbVie Inc., which acquired Allergan, who first launched BOTOX for cosmetic uses in 2002 and has since maintained the highest market share position in the aesthetic neurotoxin market with its BOTOX product, are large, experienced companies that enjoy significant competitive advantages, such as substantially greater financial resources enabling them to, among other things, market and discount aggressively.
Many of our potential competitors, including AbbVie, who first launched BOTOX for cosmetic uses in 2002 and has since maintained the highest market share position in the aesthetic neurotoxin market with its BOTOX product, are large, experienced companies that enjoy significant competitive advantages, such as substantially greater financial resources enabling them to, among other things, market and discount aggressively.
We may be able to offset a portion of the loss of profitability by decreasing any discount to customers on Jeuveau ® as compared to discounts we provided to customers prior to the Medytox Settlement Agreement.
We may be able to offset a portion of the loss of profitability by decreasing any discount to customers on Jeuveau ® as compared to discounts we provided to customers prior to the Medytox Settlement Agreements.
Agreement and the Symatese Europe Agreement and any termination or loss of significant rights, including exclusivity, under these agreements would materially and adversely affect our business. Our ability to exclusively commercialize Jeuveau ® and Evolysse™ are completely dependent on the Daewoong Agreement, and the Symatese U.S. Agreement and Symatese Europe Agreement, respectively.
Agreement and the Symatese Europe Agreement and any termination or loss of significant rights, including exclusivity, under these agreements would materially and adversely affect our business. Our ability to exclusively commercialize Jeuveau ® and Evolysse™ are completely dependent on the Daewoong Agreement, 27 Table of Contents and the Symatese U.S. Agreement and Symatese Europe Agreement, respectively.
Even if we achieve profitability in the future, we may not 19 Table of Contents be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, may adversely affect the market price of our common stock and, if needed, our ability to raise capital to continue operations.
Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, may adversely affect the market price of our common stock and, if needed, our ability to raise capital to continue operations.
We expect to expend resources furthering the development and continuation of our marketing programs and commercialization infrastructure in connection with commercializing Jeuveau ® within and outside of the United States.
We expect to expend resources furthering the development and continuation of our marketing programs and commercialization infrastructure in connection with commercializing our products within and outside of the United States.
If we raise additional capital through public or private equity offerings or offerings of securities convertible into our 20 Table of Contents equity, the ownership interest of our existing stockholders will be diluted and the terms of any such securities may have a preference over our common stock.
If we raise additional capital through public or private equity offerings or offerings of securities convertible into our equity, the ownership interest of our existing stockholders will be diluted and the terms of any such securities may have a preference over our common stock.
The Anti-Kickback Statute prohibits the offer, receipt, or payment of remuneration in exchange for or to induce the referral of patients or the use of products or services that would be paid for in whole or part by Medicare, Medicaid or other federal health care programs.
The Anti-Kickback Statute prohibits the offer, receipt, or payment of remuneration in exchange for or to induce the referral of patients or the use of products or services that 35 Table of Contents would be paid for in whole or part by Medicare, Medicaid or other federal health care programs.
Additionally, the regulatory environment governing information, security and privacy laws is increasingly demanding and continues to evolve and a number of states have adopted laws and regulations that may affect our privacy and data security practices regarding the use, disclosure and protection of PII.
Additionally, the regulatory environment governing information, security and privacy laws is increasingly demanding and continues to evolve and a number of states have adopted laws and regulations that may affect our privacy and data security practices regarding the use, disclosure and protection of personally identifiable information, or PII.
If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial 37 Table of Contents prospects for our product candidates may be harmed and our ability to generate revenue will be materially impaired. We may not obtain regulatory approval for the commercialization of any future product candidates.
If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenue will be materially impaired. We may not obtain regulatory approval for the commercialization of any future product candidates.
Interruptions in our operations caused by such an event could also result in a material disruption in our relationship with our customers. For example, if our Evolus Practice App were rendered inoperable, we would have to process orders by telephone or otherwise which may result in slower processing times and harm to our reputation.
Interruptions in our operations caused by such an event could also result in a material disruption in our relationship with our customers. For example, if our 21 Table of Contents Evolus Practice App were rendered inoperable, we would have to process orders by telephone or otherwise which may result in slower processing times and harm to our reputation.
Furthermore, the use of Jeuveau ® or any future product candidates for indications other than those cleared by the FDA may not effectively treat such conditions, which could harm our reputation in the marketplace among customers and consumers. Any of these events could harm our business and results of operations and cause our stock price to decline.
Furthermore, the use of Jeuveau ® , Evolysse™, or any future product we offer for indications other than those cleared by the FDA may not effectively treat such conditions, which could harm our reputation in the marketplace among customers and consumers. Any of these events could harm our business and results of operations and cause our stock price to decline.
As the technology, medical device and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties. 33 Table of Contents Third parties may assert that we or any of our current or future licensors, including Daewoong, are employing their proprietary technology without authorization.
As the technology, medical device and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties. Third parties may assert that we or any of our current or future licensors, including Daewoong or Symatese, are employing their proprietary technology without authorization.
Additionally, if we or others identify undesirable side effects, or other previously unknown problems, caused by Jeuveau ® , or any of our future product candidates, after obtaining regulatory approval in the United States or other jurisdictions, a number of potentially negative consequences could result, including regulatory authorities withdrawing approval or limiting the marketing of our products, requiring a recall of the product, requiring additional warnings on our product labeling or medication guides or instituting Risk Evaluation and Mitigation Strategies, or REMS.
Additionally, if we or others identify undesirable side effects, or other previously unknown problems, caused by Jeuveau ® , or any of our future product candidates, after obtaining regulatory approval in the United States or other jurisdictions, a number of potentially negative consequences could result, including regulatory authorities withdrawing approval or limiting the marketing of our products, requiring a recall of the product, requiring additional warnings on our product labeling or medication guides or instituting REMS.
The FDA, the EMA and other regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including the following: • a product candidate may not be deemed safe, effective, pure or potent; 38 Table of Contents • the data from preclinical studies and clinical trials may not be deemed sufficient; • the FDA or other regulatory authorities might not approve our third-party manufacturers’ processes or facilities; • deficiencies in the formulation, quality control, labeling, or specifications of a product candidate or in response to citizen petitions or similar documents filed in connection with the product candidate; • general requirements intended to address risks associated with a class of drugs, such as a new REMS requirement for neurotoxins, dermal fillers or other aesthetic products; • the enactment of new laws or promulgation of new regulations that change the approval requirements; or • the FDA or other regulatory authorities may change their approval policies or adopt new regulations.
The FDA, the EMA and other regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including the following: • a product candidate may not be deemed safe, effective, pure or potent; • the data from preclinical studies and clinical trials may not be deemed sufficient; • the FDA or other regulatory authorities might not approve our third-party manufacturers’ processes or facilities; • deficiencies in the formulation, quality control, labeling, or specifications of a product candidate or in response to citizen petitions or similar documents filed in connection with the product candidate; • general requirements intended to address risks associated with a class of drugs, such as a new REMS requirement for neurotoxins, hyaluronic acid gels or other aesthetic products; • the enactment of new laws or promulgation of new regulations that change the approval requirements; or • the FDA or other regulatory authorities may change their approval policies or adopt new regulations.
As disclosed in Part I, Item 3 “Legal Proceedings,” we and certain of our officers have been named as defendants in a securities class action lawsuit and we are a nominal defendant in derivative lawsuits filed against certain of our officers and directors. We maintain director and officer’s insurance coverage and continue to engage in vigorous defense of such litigation.
As disclosed in Part I, Item 3 “Legal Proceedings,” we and certain of our officers were previously named as defendants in a securities class action lawsuit and we are a nominal defendant in derivative lawsuits filed against certain of our officers and directors. We maintain director and officer’s insurance coverage and continue to engage in vigorous defense of such litigation.
Furthermore, even if they are unchallenged, any of our future in-licensed patents and patent applications may not adequately protect the licensors or our intellectual property or prevent others from designing around their or our claims.
Furthermore, even 30 Table of Contents if they are unchallenged, any of our future in-licensed patents and patent applications may not adequately protect the licensors or our intellectual property or prevent others from designing around their or our claims.
We may not be able to file for regulatory approvals or to do so on a timely basis, and even if we do file, we may not receive necessary 39 Table of Contents approvals to commercialize our products in markets outside of the United States.
We may not be able to file for regulatory approvals or to do so on a timely basis, and even if we do file, we may not receive necessary approvals to commercialize our products in markets outside of the United States.
We believe that our future success is highly dependent upon the contributions of our senior management, particularly David Moatazedi, our President, Chief Executive Officer and member of our Board of Directors, Sandra Beaver, our Chief Financial Officer, Rui Avelar, our Chief Medical Officer and Head of R&D, and Tomoko Yamagishi-Dressler, our Chief Marketing Officer, as well as other members of our senior management team.
We believe that our future success is highly dependent upon the contributions of our senior management, particularly David Moatazedi, our President, Chief Executive Officer and member of our Board of Directors, Sandra Beaver, our Chief Financial Officer, Rui Avelar, our Chief Medical Officer and Head of Research and Development, and Tomoko Yamagishi-Dressler, our Chief Marketing Officer, as well as other members of our senior management team.
A depreciation of these currencies 29 Table of Contents against the U.S. dollar will decrease the U.S. dollar equivalent of the amounts derived from foreign operations reported in our consolidated financial statements, and an appreciation of these currencies will result in a corresponding increase in such amounts.
A depreciation of these currencies against the U.S. dollar will decrease the U.S. dollar equivalent of the amounts derived from foreign operations reported in our consolidated financial statements, and an appreciation of these currencies will result in a corresponding increase in such amounts.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially 31 Table of Contents meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
If Jeuveau ® or any future product candidates are misused or used with improper techniques or are determined to cause or contribute to consumer harm, we may become subject to costly litigation by our customers or their patients.
If Jeuveau ® , Evolysse™, or any future product we offer are misused or used with improper techniques or are determined to cause or contribute to consumer harm, we may become subject to costly litigation by our customers or their patients.
If we are found to have promoted such off-label uses, we may receive warning letters from and be subject to other enforcement actions by the FDA, the European Medicines Agency, or EMA, and other regulatory agencies, and become subject to significant liability, which would materially harm our business.
If we are found to have promoted such off-label uses, we may receive warning letters from and be subject to other enforcement actions by the FDA, the EMA, and other regulatory agencies, and become subject to significant liability, which would materially harm our business.
Additionally, we are aware that multiple entrants into the dermal filler market have faced litigation related to allegations of intellectual property infringement and have either expended large amounts of money to defend these claims, attempted to invalidate a third-party’s intellectual property as a defense, or have entered into settlement and license agreements in order to commercialize their dermal filler products.
Additionally, we are aware that multiple entrants into the hyaluronic acid gel market have faced litigation related to allegations of intellectual property infringement and have either expended large amounts of money to defend these claims, attempted to invalidate a third-party’s intellectual property as a defense, or have entered into settlement and license agreements in order to commercialize their hyaluronic acid gel products.
In addition, under the Medytox Settlement Agreement we made certain representations and warranties and agreed to certain customary positive and negative covenants.
In addition, under the Medytox Settlement Agreements we made certain representations and warranties and agreed to certain customary positive and negative covenants.
These competitors may also try to compete with our aesthetic products on price both directly, through rebates and promotional programs to high volume customers and coupons to consumers, and indirectly, through attractive product bundling with complimentary products, such as dermal fillers that offer convenience and an effectively lower price compared to the total price of purchasing each product separately.
These competitors may also try to compete with our aesthetic products on price both directly, through rebates and promotional programs to high volume customers and coupons to consumers, and indirectly, through attractive product bundling with complimentary products, such as hyaluronic acid gels that offer convenience and an effectively lower price compared to the total price of purchasing each product separately.
For example, we are aware that one of our competitors, AbbVie, has obtained and plans to obtain additional indications for its neurotoxin product within medical aesthetics and, therefore, is able to market its product across a greater number of indications than Jeuveau ® .
For example, we are aware that one of our competitors, AbbVie, has obtained and plans to obtain additional indications for its neurotoxin and dermal filler products within medical aesthetics and, therefore, is able to market its product across a greater number of indications than Jeuveau ® and Evolysse™.
Any disaster recovery and business continuity plans that we and our licensors may have in place or put in place may not be adequate in the event of a serious disaster or similar event.
Any disaster recovery and business continuity plans that we and our licensors may have in place or put in place may not be adequate in the event of a 28 Table of Contents serious disaster or similar event.
The research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of drug and biologic products, such as our neurotoxin product, and medical devices, such as our dermal filler product candidates, are subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, with regulations differing from country to country.
The research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of drug and biologic products, such as our neurotoxin product, and medical devices, such as our hyaluronic acid gel product candidates, are subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, with regulations differing from country to country.
We forecast the demand for commercial quantities of our products, and if our forecasts are inaccurate, we may experience delays in shipments, increased inventory costs or inventory levels, and reduced cash flow. We purchase our products from our licensors, Daewoong and, subject to regulatory approval, Symatese.
We forecast the demand for commercial quantities of our products, and if our forecasts are inaccurate, we may experience delays in shipments, increased inventory costs or inventory levels, and reduced cash flow. We purchase our products from our licensors, Daewoong and Symatese.
If we are successful in commercializing Jeuveau ® or any other product candidate, including Evolysse™, the FDA and other regulatory agency regulations require that we report certain information about adverse medical events if those products may have caused or contributed to those adverse events.
If we are successful in commercializing our products or any other product candidate the FDA and other regulatory agency regulations require that we report certain information about adverse medical events if those products may have caused or contributed to those adverse events.
Therefore, sales of Jeuveau ® or any of our future product candidates could differ materially from our projections if our assumptions are incorrect. 22 Table of Contents Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition or results of operations.
Therefore, sales of our products or any of our future product candidates could differ materially from our projections if our assumptions are incorrect. Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition or results of operations.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to 27 Table of Contents limit commercialization of our products.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our products.
With respect to consumer demand, the treatment of glabellar lines with Jeuveau ® is an elective procedure, the cost of which must be borne by the consumer, and we do not expect costs related to the treatment to be reimbursable through any third-party payor, such as Medicaid, Medicare or commercial insurance.
With respect to consumer demand, the treatment with our products is an elective procedure, the cost of which must be borne by the consumer, and we do not expect costs related to the treatment to be reimbursable through any third-party payor, such as Medicaid, Medicare or commercial insurance.
We expect that we will continue to expend substantial resources for the foreseeable future in order to continue to market and sell Jeuveau ® and for the clinical development of Evolysse ™ and any additional product candidates we may choose to pursue.
We expect that we will continue to expend substantial resources for the foreseeable future in order to continue to market and sell our products and for the continued clinical development of Evolysse ™ and any additional product candidates we may choose to pursue.
If these assumptions are incorrect, or if we experience other risks or uncertainties set forth in this Annual Report on Form 10-K, we may require additional capital to operate our business.
If these assumptions are 18 Table of Contents incorrect, or if we experience other risks or uncertainties set forth in this Annual Report on Form 10-K, we may require additional capital to operate our business.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time 41 Table of Contents consuming.
We are substantially dependent on our relationship with Symatese for the regulatory approval process of the Evolysse™ dermal filler product candidates. While we have agreed to share certain costs associated with the regulatory approval process to provide our experience to Symatese, Symatese is ultimately responsible for obtaining regulatory approval of the Evolysse™ product line.
We are substantially dependent on our relationship with Symatese for the regulatory approval process of the Evolysse™ hyaluronic acid gel product candidates. While we have agreed to share certain costs associated with the regulatory approval process to provide our experience to Symatese, Symatese is ultimately responsible for obtaining regulatory approval of the Evolysse™ product line.
Moreover, consumer demand may fluctuate over time as a result of consumer sentiment about the benefits and risks of aesthetic procedures generally and Jeuveau ® in particular, changes in demographics and social trends, rising inflation and general consumer confidence and consumer discretionary spending, which may be impacted by the COVID-19 outbreak, economic and political conditions.
Moreover, consumer demand may fluctuate over time as a result of consumer sentiment about the benefits and risks of aesthetic procedures generally and our products in particular, changes in demographics and social trends, rising inflation and general consumer confidence and consumer discretionary spending, which may be impacted by economic and political conditions.
Each of the Medytox Litigation and the ITC Action diverted the attention of our senior management and were costly, in terms of legal costs and the ultimate payments and royalties to be paid under the Medytox Settlement Agreement.
Both the Medytox Litigation and ITC Action diverted the attention of our senior management and were costly, in terms of legal costs and the ultimate payments and royalties to be paid under the Medytox Settlement Agreements.
In addition, competitors may develop new technologies within the medical aesthetic market that may be superior in safety and efficacy to our products or offer alternatives to the use of toxins or dermal fillers, including surgical and radio frequency techniques.
In addition, competitors may develop new technologies within the medical aesthetic market that may be superior in safety and efficacy to our products or offer alternatives to the use of toxins or hyaluronic acid gels, including surgical and radio frequency techniques.
The continued commercial success of Jeuveau ® and any future product candidates, including a proposed higher strength dose of Jeuveau ® and the Evolysse™ line of dermal fillers, will depend significantly on the broad adoption and use of the resulting product by aesthetic practitioners for approved indications, including, in the case of Jeuveau ® , the treatment of glabellar lines and other aesthetic indications that we may seek to pursue.
The continued commercial success of Jeuveau ® and any future product candidates, including a proposed higher strength dose of Jeuveau ® and the Evolysse™ collection of hyaluronic acid gels, will depend significantly on the broad adoption and use of the resulting product by aesthetic practitioners for approved indications, including, in the case of Jeuveau ® , the treatment of glabellar lines and other aesthetic indications that we may seek to pursue.
In the event we fail to comply with the terms of the Medytox Settlement Agreement, subject to applicable cure periods, Medytox would have the ability to terminate the Medytox Settlement Agreement and thereby cancel the licenses granted to us and re-institute litigation against us.
In the event we fail to comply with the terms of the Medytox Settlement Agreements, subject to applicable cure periods, Medytox would have the ability to terminate the Medytox Settlement Agreements and thereby cancel the licenses granted to 19 Table of Contents us and re-institute litigation against us.
While we do not expect that Jeuveau ® or Evolysse™ will subject us to the various U.S. federal and most state laws intended to prevent health care fraud and abuse, we may in the future become subject to such laws.
While we do not expect that our products will subject us to the various U.S. federal and most state laws intended to prevent health care fraud and abuse, we may in the future become subject to such laws.
The risk of a security incident or system disruption, particularly through cybersecurity incidents, including by computer hackers, foreign governments and cybercriminals, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
The risk of a security incident or system disruption, particularly through cybersecurity incidents, including by computer hackers, foreign governments and cybercriminals, has generally increased as the number, intensity and sophistication of attempted attacks, including through the use of emerging technologies, such as artificial intelligence, and intrusions from around the world have increased.
We may need to increase the size of our organization, including our sales and marketing capabilities, in order to further market and sell Jeuveau ® and we may experience difficulties in managing this growth. As of December 31, 2023, we had 273 employees, all of whom were full-time employees.
We may need to increase the size of our organization, including our sales and marketing capabilities, in order to further market and sell our products and we may experience difficulties in managing this growth. As of December 31, 2024, we had 332 employees, all of whom were full-time employees.
The FDA and other regulatory agencies strictly regulate the marketing and promotional claims that are made about 26 Table of Contents pharmaceutical products, such as Jeuveau ® . In particular, a product may not be promoted for uses or indications that are not approved by the FDA or other similar regulatory authorities as reflected in the product’s approved labeling.
The FDA and other regulatory agencies strictly regulate the marketing and promotional claims that are made about regulated products, such as Jeuveau ® and Evolysse™. In particular, a product may not be promoted for uses or indications that are not approved by the FDA or other similar regulatory authorities as reflected in the product’s approved labeling.
Separate indemnity agreements have been issued with each director and executive officer. 44 Table of Contents In addition, as permitted by Section 145 of the DGCL, our bylaws and our indemnification agreements that we have entered into with our directors and officers, among other things provide that: • We have indemnified our directors and officers for serving us in those capacities, or for serving as a director, officer, employee or agent of other business enterprises at our request, to the fullest extent permitted by Delaware law.
In addition, as permitted by Section 145 of the DGCL, our bylaws and our indemnification agreements that we have entered into with our directors and officers, among other things provide that: • We have indemnified our directors and officers for serving us in those capacities, or for serving as a director, officer, employee or agent of other business enterprises at our request, to the fullest extent permitted by Delaware law.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+1 added−0 removed12 unchanged
Biggest changeAdditionally, as part of our overall risk management program, we maintain a global insurance portfolio with cybersecurity coverage. To date, we do not believe that our business, results of operations and financial condition have been materially affected as a result of identified cybersecurity threats or incidents, including as a result of any previous cybersecurity incidents that we are aware of.
Biggest changeTo date, we do not believe that our business, including our business strategy,, results of operations, or financial condition have been materially affected, or are reasonably likely to be materially affected, as a result of identified cybersecurity threats or incidents, including as a result of any previous cybersecurity incidents that we are aware of.
Added
Additionally, as part of our overall risk management program, we maintain a global insurance portfolio with cybersecurity coverage.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed1 unchanged
Biggest changeOn July 27, 2023, we entered into an amendment to the existing lease agreement for our corporate headquarters for additional office space of approximately 8,333 square feet of space. The lease term for the additional office space is expected to commence in the second half of 2024. The lease agreement expires on January 31, 2030.
Biggest changeOn July 27, 2023, we entered into an amendment to the existing lease agreement for our corporate headquarters for additional office space of approximately 8,333 square feet of space. On October 16, 2024, we entered into the Second Amendment to the Lease Agreement (the “Second Lease Amendment”) to lease additional office space for our corporate headquarters.
With the additional office space, we believe our facilities are sufficient for our current needs. When our lease expires, we may exercise our renewal option or look for additional or alternate space for our operations, and we believe that suitable additional or alternative space will be available in the future on commercially reasonable terms.
When our lease expires, we may exercise 43 Table of Contents our renewal option or look for additional or alternate space for our operations, and we believe that suitable additional or alternative space will be available in the future on commercially reasonable terms.
Added
The lease term for the Second Lease Amendment is expected to commence in the second half of 2025. The lease agreement expires on January 31, 2030. With the additional office space, we believe our facilities are sufficient for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

8 edited+1 added−0 removed7 unchanged
Biggest changeOn February 10, 2022, Alphaeon Corporation served its motion to dismiss the amended complaint. Both motions were fully briefed on June 16, 2022. The outcome of the legal proceeding is uncertain at this point. Based on information available to us at present, management cannot reasonably estimate a range of loss with respect to this matter.
Biggest changeOn January 18, 2022, we and the officer defendants served a motion to dismiss the amended complaint. On February 10, 2022, Alphaeon Corporation served its motion to dismiss the amended complaint. Both motions were fully briefed on June 16, 2022.
On October 13, 2021, we received a substantially similar demand to inspect specified categories of our books and records under Section 220 of the Delaware General Corporations Law from another putative stockholder. The subject of the demand is substantially similar to the allegations in the putative securities class action and derivative complaints described above.
On October 13, 2021, we received a substantially similar demand to inspect specified categories of our books and records under Section 220 of the Delaware General Corporations Law from another putative stockholder. The subject of the demand is substantially similar to the allegations in the Securities Class Action and Derivative Complaint described above.
The complaints assert violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts related to our acquisition of the right to sell Jeuveau ® , the complaint against us filed by Allergan and Medytox in the U.S.
The complaints assert violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts related to our acquisition of the right to sell Jeuveau ® , the complaint against us filed by Allergan and Medytox in the U.S.
Item 3. Legal Proceedings. 47 Table of Contents Securities Class Action Lawsuit On October 16 and 28, 2020, two putative securities class action complaints were filed in the U.S. District Court for the Southern District of New York by Evolus shareholders Armin Malakouti and Clinton Cox, respectively, naming us and certain of our officers as defendants.
Item 3. Legal Proceedings. Securities Class Action Lawsuit On October 16 and 28, 2020, two putative securities class action complaints were filed in the U.S. District Court for the Southern District of New York by Evolus shareholders Armin Malakouti and Clinton Cox, respectively, naming us and certain of our officers as defendants.
On December 29, 2020, the plaintiffs filed a joint stipulation to consolidate their actions and on February 5, 2021, the court consolidated the action under the caption In re Evolus, Inc. Derivative Litigation, No. 1:20-cv-09986-PPG, and adjourned defendants’ time to move, answer or otherwise respond to the complaints.
On December 29, 2020, the plaintiffs filed a joint stipulation to consolidate their actions and on February 5, 2021, the court consolidated the action under the caption In re Evolus, Inc. Derivative Litigation, No. 1:20-cv-09986-PPG, which we refer to as the Derivative Complaint, and adjourned defendants’ time to move, answer or otherwise respond to the complaints.
Other Legal Matters In addition to the legal proceedings set forth above, from time to time, we may be subject to other legal proceedings and claims in the ordinary course of business.
Other Legal Matters In addition to the legal proceedings set forth above, from time to time, we may be subject to other legal proceedings and claims in the ordinary course of business. 44 Table of Contents
International Trade Commission related to Jeuveau ® (the “ITC Action”), and risks related to the ITC Action. The complaints assert a putative class period of February 1, 2019 to July 6, 2020. The court consolidated the actions on November 13, 2020, under the caption In re Evolus Inc. Securities Litigation, No. 1:20-cv-08647 (PGG).
International Trade Commission related to Jeuveau ® (the “ITC Action”), and risks related to the ITC Action. The complaints assert a putative class period of February 1, 2019 to July 6, 2020. The court consolidated the actions on November 13, 2020, under the caption In re Evolus Inc.
On September 17, 2021, the court appointed a lead plaintiff and lead counsel. On November 17, 2021, the lead plaintiff filed an amended class action complaint against us, three of our officers, and Alphaeon Corporation, our former majority shareholder. On January 18, 2022, we and the officer defendants served a motion to dismiss the amended complaint.
Securities Litigation, No. 1:20-cv-08647 (PGG), which we refer to as the Securities Class Action. On September 17, 2021, the court appointed a lead plaintiff and lead counsel. On November 17, 2021, the lead plaintiff filed an amended class action complaint against us, three of our officers, and Alphaeon Corporation, our former majority shareholder.
Added
On September 26, 2024, the court granted our motion to dismiss the amended complaint and on October 18, 2024, the court entered final judgment in favor of us, which the Plaintiffs did not appeal. Accordingly, the Securities Class Action is now concluded.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−4 removed5 unchanged
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been listed and traded on the Nasdaq under the symbol “EOLS” since February 12, 2018. Holders of Record As of March 1, 2024, we had approximately 36 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been listed and traded on the Nasdaq Stock Market under the symbol “EOLS” since February 12, 2018. Holders of Record As of February 28, 2025, we had approximately 24 holders of record of our common stock.
The graph assumes that $100 was invested at the market close on the last trading day for the year ended December 31, 2018 in each investment and assumes the reinvestment of any dividends. The stock price performance on the graph is not necessarily indicative of future stock price performance.
The graph assumes that $100 was invested at the market close on the last trading day for the year ended December 31, 2019 in each investment and assumes the reinvestment of any dividends. The stock price performance on the graph is not necessarily indicative of future stock price performance.
Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed incorporated by reference into any of our filings under the Securities Act or Exchange Act, except as shall be expressly set forth by specific reference in such filing. 49 Table of Contents This graph shows a comparison of the cumulative total return on our common stock, The Nasdaq Composite Index, and The Nasdaq Biotechnology Index for the five years ended December 31, 2023.
Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed incorporated by reference into any of our filings under the Securities Act or Exchange Act, except as shall be expressly set forth by specific reference in such filing. 46 Table of Contents This graph shows a comparison of the cumulative total return on our common stock, The Nasdaq Composite Index, and The Nasdaq Biotechnology Index for the five years ended December 31, 2024.
Removed
Company/Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Evolus $ 100.00 $ 102.27 $ 28.24 $ 54.71 $ 63.11 $ 88.49 Nasdaq Composite Index $ 100.00 $ 135.23 $ 194.24 $ 235.78 $ 157.74 $ 226.24 Nasdaq Biotechnology Index $ 100.00 $ 124.41 $ 156.36 $ 155.37 $ 138.42 $ 143.60 Unregistered Sales of Equity Securities As consideration for the rights granted under the Symatese Europe Agreement as described in Note 2.
Added
Company/Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Evolus $ 100.00 $ 27.61 $ 53.49 $ 61.71 $ 86.52 $ 90.71 Nasdaq Composite Index $ 100.00 $ 143.64 $ 174.36 $ 116.65 $ 167.30 $ 215.22 Nasdaq Biotechnology Index $ 100.00 $ 125.69 $ 124.89 $ 111.27 $ 115.42 $ 113.84 47 Table of Contents
Removed
Basis of Presentation and Summary of Significant Accounting Policies , on December 20, 2023 we issued to Symatese 610,000 shares of our common stock, par value $0.00001 per share.
Removed
Such shares were offered and sold in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), set forth under Section 4(a)(2) of the Securities Act relating to sales by an issuer not involving any public offering.
Removed
Symatese has represented to us that it is an accredited investor and that it acquired such shares of common stock for investment purposes only and not with a view to any resale, distribution or other disposition of securities in violation of the Securities Act. 50 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

57 edited+31 added−23 removed37 unchanged
Biggest changeResults of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the periods indicated: Year Ended December 31, (in millions) 2023 2022 Revenue: Product revenue, net $ 199.7 $ 146.6 Service revenue 2.4 2.0 Total net revenues 202.1 148.6 Operating expenses: Product cost of sales (excludes amortization of intangible assets) 61.6 55.9 Selling, general and administrative 164.9 141.8 Research and development 6.6 4.7 In-process research and development 8.9 2.0 Revaluation of contingent royalty obligation payable to Evolus Founders 4.3 5.8 Depreciation and amortization 5.1 3.7 Total operating expenses 251.3 213.9 Loss from operations (49.2) (65.3) Non-operating expense, net (12.3) (9.0) Loss before income taxes: (61.5) (74.3) Income tax expense 0.2 0.1 Net loss $ (61.7) $ (74.4) Unrealized loss, net of tax (0.1) (0.3) Comprehensive loss $ (61.8) $ (74.7) The following table summarizes our gross profit margin for the periods indicated: Year Ended December 31, (in millions) 2023 2022 Total net revenues $ 202.1 $ 148.6 Cost of sales: Product cost of sales (excludes amortization of intangible assets) 61.6 55.9 Amortization of distribution right intangible asset 3.0 3.0 Total cost of sales 64.5 58.9 Gross profit $ 137.6 $ 89.8 Gross profit margin 68.1 % 60.4 % Net Revenues We currently operate in one reportable segment, and all of our net revenues are derived from sales of Jeuveau ® .
Biggest changeComparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the periods indicated: Year Ended December 31, (in millions) 2023 2022 Change % Change Revenue: Product revenue, net $ 199.7 $ 146.6 $ 53.1 36 % Service revenue 2.4 2.0 0.4 20 % Total net revenues 202.1 148.6 53.5 36 % Cost of goods sold 64.5 58.8 5.7 10 % Gross profit 137.6 89.8 47.8 53 % Operating expenses: Selling, general and administrative 164.9 141.8 23.1 16 % Research and development 6.6 4.7 1.9 40 % In-process research and development 8.9 2.0 6.9 345 % Revaluation of contingent royalty obligation payable to Evolus Founders 4.3 5.8 (1.5) (26) % Depreciation and amortization 2.2 0.8 1.4 175 % Total operating expenses 186.8 155.1 31.7 20 % Loss from operations (49.2) (65.3) 16.1 (25) % Non-operating expense, net (12.3) (9.0) (3.3) 37 % Loss before income taxes: (61.5) (74.3) 12.8 (17) % Income tax expense 0.2 0.1 0.1 100 % Net loss $ (61.7) $ (74.4) $ 12.7 (17) % Unrealized loss, net of tax (0.1) (0.3) 0.2 (67) % Comprehensive loss $ (61.8) $ (74.7) $ 12.9 (17) % The following table summarizes our gross profit margin for the periods indicated: Year Ended December 31, (in millions) 2023 2022 Change % Change Total net revenues $ 202.1 $ 148.6 $ 53.5 36 % Cost of goods sold 64.5 58.8 5.7 10 % Gross profit $ 137.6 $ 89.8 $ 47.8 53 % Gross profit margin 68 % 60 % Net Revenues We currently operate in one reportable segment, and all of our net revenues are derived from sales of Jeuveau ® .
You should carefully read “Special Note Regarding Forward-Looking Statements” and Item 1A “Risk Factors.” Overview We are a global performance beauty company with a customer-centric approach to delivering breakthrough products in the cash-pay aesthetic market. Our first product, Jeuveau ® (prabotulinumtoxinA-xvfs), is currently sold in the United States, Canada and certain European countries.
You should carefully read “Special Note Regarding Forward-Looking Statements” and Item 1A “Risk Factors.” Overview We are a global performance beauty company with a customer-centric approach to delivering breakthrough products in the cash-pay aesthetic market. Our first product, Jeuveau ® (prabotulinumtoxinA-xvfs), is currently sold in the United States, Canada, certain European countries and Australia.
Our gross profit margin was impacted negatively and materially through September 2022, by our payments under the Medytox/Allergan Settlement Agreements. Our gross profit margin has been and will continue to be negatively impacted to a lesser extent from September 2022 to September 2032 as we pay royalty obligations to Medytox at a mid-single digit percentage of net revenue.
Our gross profit margin was impacted negatively and materially through September 2022, by our payments under the Medytox Settlement Agreements. Our gross profit margin has been and will continue to be negatively impacted to a lesser extent from September 2022 to September 2032 as we pay royalty obligations to Medytox at a mid-single digit percentage of net revenue.
Selling, General and Administrative Selling, general and administrative expenses increased by $23.1 million, or 16.3%, to $164.9 million for the year ended December 31, 2023 from $141.8 million for the year ended December 31, 2022, primarily resulting from increasing personnel costs and related to our commercial activities.
Selling, General and Administrative Selling, general and administrative expenses increased by $23.1 million, or 16%, to $164.9 million for the year ended December 31, 2023 from $141.8 million for the year ended December 31, 2022, primarily resulting from increasing personnel costs and related to our commercial activities.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. We generate product revenue from the sale of Jeuveau ® in the United States and Europe and service revenue from the sale of Jeuveau ® through a distribution partner in Canada.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. We generate product revenue from the sale of Jeuveau ® in the United States, Europe, and Australia and service revenue from the sale of Jeuveau ® through a distribution partner in Canada.
Current and Future Capital Requirements 57 Table of Contents We believe that our current capital resources, which consist of cash and cash equivalents, future cash generated from operations and sales under the ATM Sales Agreement will be sufficient to satisfy our cash requirements for at least the next twelve months for working capital to support our daily operations and meet commitments under our contractual obligations with third parties, although we may wish to access the debt and equity markets or other sources of financing to satisfy our long-term cash requirements as further discussed below.
Current and Future Capital Requirements We believe that our current capital resources, which consist of cash and cash equivalents, future cash generated from operations and sales under the ATM Sales Agreement will be sufficient to satisfy our cash requirements for at least the next twelve months for working capital to support our daily operations and meet commitments under our contractual obligations with third parties, although we may wish to access the debt and equity markets or other sources of financing to satisfy our long-term cash requirements as further discussed below.
We have not sold any shares under the ATM Sales Agreement. See Note 9. Stockholders’ Equity for additional information. The Pharmakon Term Loans On December 14, 2021, we entered into a loan agreement with Pharmakon. Pursuant to the terms of the agreement, Pharmakon agreed to make term loans to us in two tranches.
We have not sold any shares under the ATM Sales Agreement. See Note 10. Stockholders’ Equity for additional information. The Pharmakon Term Loans On December 14, 2021, we entered into a loan agreement with Pharmakon. Pursuant to the terms of the agreement, Pharmakon agreed to make term loans to us in two tranches.
Material Cash Requirements Our material cash requirements from known contractual and other obligations, including commitments for capital expenditures, primarily consist of (i) principal and interest payments related to our Pharmakon Term Loans (future interest payments on our outstanding Pharmakon Term Loans total approximately $60.9 million, with $17.9 million due within twelve months), (ii) quarterly royalty payments to the Evolus Founders of a low single digit percentage of net sales of Jeuveau ® (these obligations terminate in the quarter after the 10-year anniversary of the first commercial sale of Jeuveau ® in the United States), (iii) quarterly royalty payments to Medytox of a low-double digit royalty on net sales of Jeuveau ® sold in the United States and other Evolus territories (during the period from September 17, 2022 to September 16, 2032), (iv) minimum purchase obligations under the Daewoong Agreement, (v) €12.1 milestone payments under the Symatese U.S.
Material Cash Requirements Our material cash requirements from known contractual and other obligations, including commitments for capital expenditures, primarily consist of (i) principal and interest payments related to our Pharmakon Term Loans (future interest payments on our outstanding Pharmakon Term Loans total approximately $40.6 million, with $16.8 million due within twelve months), (ii) quarterly royalty payments to the Evolus Founders of a low single digit percentage of net sales of Jeuveau ® (these obligations terminate in the quarter after the 10-year anniversary of the first commercial sale of Jeuveau ® in the United States), (iii) quarterly royalty payments to Medytox of a low-double digit royalty on net sales of Jeuveau ® sold in the United States and other Evolus territories (during the period from September 17, 2022 to September 16, 2032), (iv) minimum purchase obligations under the Daewoong Agreement, (v) €12.1 milestone payments under the Symatese U.S.
On May 9, 2023, we entered into a Third Amendment to the loan agreement, which provided for the advancement of the second tranche of $50.0 million in two installments: (i) $25.0 million 56 Table of Contents advanced on May 31, 2023 and (ii) $25.0 million advanced on December 15, 2023, which amounts were advanced on such dates subject to the terms and conditions of the Pharmakon Term Loans.
On May 9, 2023, we entered into a Third Amendment to the loan agreement, which provided for the advancement of the second tranche of $50.0 million in two installments: (i) $25.0 million advanced on May 31, 2023 and (ii) $25.0 million advanced on December 15, 2023, which amounts were advanced on such dates subject to the terms and conditions of the Pharmakon Term Loans.
Net revenues during the year ended December 31, 2023 and 2022 consisted of $2.4 million and $2.0 million of service revenue, respectively, from the sale of Jeuveau ® through a distribution partner in Canada.
Net revenues during the year ended December 31, 2024 and 2023 consisted of $2.0 million and $2.4 million of service revenue, respectively, from the sale of Jeuveau ® through a distribution partner in Canada.
Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions and such differences could be material to the financial position and results of operations.
Generally, we base our estimates on historical 58 Table of Contents experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions and such differences could be material to the financial position and results of operations.
Non-Operating Expense, Net Non-operating expense, net, increased by $3.3 million, or 36.6%, to $12.3 million for the year ended December 31, 2023 from $9.0 million for the year ended December 31, 2022, primarily due the advancement of the $50.0 million second tranche of the Pharmakon Term Loans in 2023.
Non-Operating Expense, Net Non-operating expense, net, increased by $3.3 million, or 37%, to $12.3 million for the year ended December 31, 2023 from $9.0 million for the year ended December 31, 2022, primarily due the advancement of the $50.0 million second tranche of the Pharmakon Term Loans in 2023.
For the year ended December 31, 2023, cash provided by financing activities resulted from $50.0 million net proceeds from drawing on the second tranche of the Pharmakon Term Loans as described above. 59 Table of Contents Indebtedness See “ —Liquidity and Capital Resources ” for a description of our Pharmakon Term Loans.
For the year ended December 31, 2023, cash provided by financing activities primarily resulted from $50.0 million net proceeds from drawing on the second tranche of the Pharmakon Term Loans as described above. Indebtedness See “ —Liquidity and Capital Resources—The Pharmakon Term Loans ” for a description of our Pharmakon Term Loans.
Agreement consisting of €1.6 million in June 2025, €4.1 million in June 2026, €3.2 million in June 2027, and €3.2 million in June 2028, in each case subject to three of the dermal filler products gaining approval prior to that date, (vi) €3.1 million of milestone payments under the Symatese Europe Agreement consisting of : €1.2 million on the second anniversary of certain regulatory approvals and €1.9 million on the earlier of the third anniversary of certain regulatory approvals or following a year in which we achieves €25 million in revenue in Europe for the dermal filler products, and (vii) obligations under operating leases related to our office space which are described in more detail in Item 8.
Agreement consisting of €1.6 million in June 2025, €4.1 million in June 2026, €3.2 million in June 2027, and €3.2 million in June 2028, in each case subject to three of the hyaluronic acid gel products gaining approval prior to that date, (vi) €3.1 million of milestone payments under the Symatese Europe Agreement consisting of: €1.2 million on the second anniversary of certain regulatory approvals and €1.9 million on the earlier of the third anniversary of certain regulatory approvals or following a year in which we achieves €25 million in revenue in Europe for the hyaluronic acid gel products, and (vii) obligations under operating leases related to our office space which are described in more detail in Note 8.
Our future funding requirements will depend on many factors, including, but not limited to: • the rate of revenue growth for Jeuveau ® in the United States and success of planned international launches; • the timing of regulatory approval for the Evolysse™ dermal filler product line in the United States and Europe by Symatese and our ability to successfully commercialize these products; • development costs and milestone payments related to the Evolysse™ products; • our ability to forecast demand for our products, scale our supply to meet that demand and manage working capital effectively; • corporate development activities including the purchase, license, or other acquisition of products and services to add to our product or service offerings; • the number, characteristics, and development stage of any future product candidates we may develop or acquire; • the timing and costs of any ongoing or future clinical programs we may conduct; • the cost of manufacturing our product or any future product candidates and any products we successfully commercialize, including costs associated with our supply chain; • the timing and amounts of the royalty and other payments payable in connection with the Medytox Settlement Agreement; • the amounts of the royalty payable to the Evolus Founders; • the cost of commercialization activities for Jeuveau ® , the Evolysse™ dermal filler product line or any future product candidates that are approved or cleared for sale, including marketing, sales and distribution costs; • the cost of maintaining a sales force, the productivity of that sales force, the market acceptance of our products and the actions and product introductions of our competitors; • our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements that we may enter into; • any product liability or other lawsuits related to our products; • the cost of any current litigation, including our ongoing securities class action lawsuit and shareholder derivative lawsuit; 58 Table of Contents • the expenses needed to attract and retain skilled personnel; • the costs associated with being a public company; • the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing intellectual property and any other future intellectual litigation we may be involved in; and • the timing, receipt and amount of sales of any future approved or cleared products, if any.
Our future funding requirements will depend on many factors, including, but not limited to: • the rate of revenue growth for Jeuveau ® and Evolysse™ in the markets in which they are launched; • the timing of regulatory approval for the additional Evolysse™ products in the United States and Europe by Symatese and our ability to successfully commercialize these products; • development costs and milestone payments related to the Evolysse™ products; • our ability to forecast demand for our products, scale our supply to meet that demand and manage working capital effectively; • corporate development activities including the purchase, license, or other acquisition of products and services to add to our product or service offerings; • the number, characteristics, and development stage of any future product candidates we may develop or acquire; • the timing and costs of any ongoing or future clinical programs we may conduct; • the cost of manufacturing our product or any future product candidates and any products we successfully commercialize, including costs associated with our supply chain; • the timing and amounts of the royalty and other payments payable in connection with the Medytox Settlement Agreements; • the amounts of the royalty payable to the Evolus Founders; • the cost of commercialization activities for Jeuveau ® , the Evolysse™ hyaluronic acid gel product line or any future product candidates that are approved or cleared for sale, including marketing, sales and distribution costs; • the cost of maintaining a sales force, the productivity of that sales force, the market acceptance of our products and the actions and product introductions of our competitors; 56 Table of Contents • our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements that we may enter into; • any product liability or other lawsuits related to our products; • the cost of any current litigation, including our ongoing securities class action lawsuit and shareholder derivative lawsuit; • the expenses needed to attract and retain skilled personnel; • the costs associated with being a public company; • the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing intellectual property and any other future intellectual litigation we may be involved in; and • the timing, receipt and amount of sales of any future approved or cleared products, if any.
Litigation Settlement As described in “—Overview— Impact of Settlement Agreements ,” on February 18, 2021, upon entering into the Medytox/Allergan Settlement Agreements, we agreed to pay to Allergan and Medytox $35.0 million in multiple payments over two years, of which we paid the first payment of $15.0 million in the third quarter of 2021, the second payment of $15.0 million in the first quarter of 2022, and the final pay ment of $5.0 million in the first quarter of 2023.
Litigation Settlement On February 18, 2021, upon entering into the Medytox Settlement Agreements, we agreed to pay to Allergan and Medytox $35.0 million in multiple payments over two years, of which we paid the first payment of $15.0 million in the third quarter of 2021, the second payment of $15.0 million in the first quarter of 2022, and the final pay ment of $5.0 million in the first quarter of 2023.
In-process Research and Development In-process research and development increased by $6.9 million, or 343.5%, to $8.9 million for the year ended December 31, 2023 from $2.0 million for the year ended December 31, 2022.
In-process Research and Development In-process research and development increased by $6.9 million, or 345%, to $8.9 million for the year ended December 31, 2023 from $2.0 million for the year ended December 31, 2022.
We anticipate our continued sales growth will depend on our ability to grow our customer base and increase purchases by our current customers in the competitive aesthetic market as well as on regulatory approval for the Evolysse TM dermal filler product line in the United States and Europe by Symatese.
We anticipate our continued sales growth will depend on our ability to grow our customer base and increase purchases by our current customers in the competitive aesthetic market as well as on regulatory approval for the Evolysse TM hyaluronic acid gel product line in the United States and Europe by Symatese.
While our significant accounting policies are more fully described in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies to be most critical for fully understanding and evaluating our financial condition and results of operations, as these policies relate to the more significant areas involving management’s judgments and estimates.
While our significant accounting policies are more fully described in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K, we believe the following accounting policies to be most critical for fully understanding and evaluating our financial condition and results of operations, as these policies relate to the more significant areas involving management’s judgments and estimates.
Selling, general and administrative expenses may fluctuate in the future primarily due to potential changes in marketing strategies and international launches. Research and Development Research and development expenses increased by $1.8 million, or 38.3%, to $6.6 million for the year ended December 31, 2023 from $4.7 million for the year ended December 31, 2022.
Selling, general and administrative expenses may fluctuate in the future primarily due to potential changes in marketing strategies and international launches. Research and Development Research and development expenses increased by $1.9 million, or 40%, to $6.6 million for the year ended December 31, 2023 from $4.7 million for the year ended December 31, 2022.
The fair value of the obligations is valued quarterly and is referred to in our consolidated financial statements as the contingent royalty obligation. As of December 31, 2023 and 2022, we recorded an aggregate balance of $45.0 million and $46.3 million, respectively, on our consolidated balance sheet for the future royalty payment obligation to Evolus Founders.
The fair value of the obligations is valued quarterly and is referred to in our consolidated financial statements as the contingent royalty obligation. As of December 31, 2024 and 2023, we recorded an aggregate balance of $44.8 million and $45.0 million, respectively, on our consolidated balance sheet for the future royalty payment obligation to Evolus Founders.
Significant increases (decreases) in the discount rate would result in a significantly lower (higher) fair value measurement, which could materially impact the fair value reported on the consolidated balance sheet. Recently Issued and Adopted Accounting Pronouncements We describe the recently issued accounting pronouncements that apply to us in Item 8. Consolidated Financial Statements and Supplementary Data - Note 2.
Significant increases (decreases) in the discount rate would result in a significantly lower (higher) fair value measurement, which could materially impact the fair value reported on the consolidated balance sheet. Recently Issued and Adopted Accounting Pronouncements We describe the recently issued accounting pronouncements that apply to us in Note 2.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 (in millions) Net cash provided by (used in): Operating activities $ (34.0) $ (84.9) Investing activities (1.6) (2.9) Financing activities 44.6 (4.1) Effect of exchange rates on cash (0.1) (0.3) Change in cash and cash equivalents 8.9 (92.3) Cash and cash equivalents, beginning of period 53.9 146.3 Cash and cash equivalents, end of period $ 62.8 $ 53.9 Operating Activities For the year ended December 31, 2023, operating activities used $34.0 million of cash, which primarily resulted from our net loss of $61.7 million.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 2022 (in millions) Net cash provided by (used in): Operating activities $ (18.0) $ (34.0) $ (84.9) Investing activities (4.8) (1.6) (2.9) Financing activities 47.4 44.6 (4.1) Effect of exchange rates on cash and cash equivalents (0.5) (0.1) (0.3) Change in cash and cash equivalents 24.1 8.9 (92.3) Cash and cash equivalents, beginning of period 62.8 53.9 146.3 Cash and cash equivalents, end of period $ 87.0 $ 62.8 $ 53.9 Operating Activities For the year ended December 31, 2024, operating activities used $18.0 million of cash, which primarily resulted from our net loss of $50.4 million.
At the time 60 Table of Contents Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the estimated material right reward, or Reward, that the customer might redeem in the future.
At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the estimated material right reward, or Reward, that the customer might redeem in the future.
We anticipate that our product cost of sales will fluctuate in line with changes in revenues until the expiration of our Medytox royalty obligation in September 2032. Gross Profit Margin Our gross profit margin was 68.1% and 60.4% for the years ended December 31, 2023 and 2022, respectively.
We anticipate that our cost of goods sold will fluctuate in line with changes in revenues until the expiration of our Medytox royalty obligation in September 2032. Gross Profit Margin Our gross profit margin was 68% and 60% for the years ended December 31, 2023 and 2022, respectively.
Contingent Royalty Obligation to the Evolus Founders We determine the fair value of the contingent royalty obligation payable to the Evolus Founders under the Amended Purchase Agreement based on significant unobservable inputs using a discounted cash flows method.
Contingent Royalty Obligation to the Evolus Founders We determine the fair value of the contingent royalty obligation payable to the Evolus Founders based on significant unobservable inputs using a discounted cash flows method.
Since inception, we have incurred recurring net operating losses and have an accumulated deficit of $559.0 million as of December 31, 2023 as a result of ongoing efforts to develop and commercialize Jeuveau ® , including providing selling, general and administrative support for our operations.
Since inception, we have incurred recurring net operating losses and have an accumulated deficit of $609.4 million as of December 31, 2024 as a result of ongoing efforts to develop and commercialize Jeuveau ® , including providing selling, general and administrative support for our operations.
Symatese Europe Agreement The Symatese Europe Agreement includes certain milestone payments and minimum annual purchases we are required to make in order to maintain the exclusivity of the license. We may, however, meet these minimum purchase obligations by achieving certain market share in our licensed territory.
Agreement includes certain milestone payments, development cost-sharing arrangements, and minimum annual purchases we are required to make in order to maintain the exclusivity of the license. We may, however, meet these minimum purchase obligations by achieving certain market share in our licensed territory.
During the years ended December 31, 2023 and 2022, the revaluation charges of $4.3 million and $5.8 million, respectively, were primarily driven by changes in management assumptions relating to revenue forecasts, the discount rate used and the timing of cash flows.
During the years ended December 31, 2024 and 2023, the revaluation charges of $7.2 million and $4.3 million, respectively, were primarily driven by changes in management assumptions relating to revenue forecasts, the discount rate used and the timing of cash flows.
Operating activities also includes adjustments for certain non-cash charges including $16.5 million of stock-based compensation expense, $1.4 million of provision of allowance for doubtful accounts, $1.1 million of amortization of debt discount and issuance costs, $5.1 million of depreciation and amortization, $4.3 million in revaluation of our contingent royalty obligation and $4.4 million of in-process research and development expense.
Operating activities also includes adjustments for certain non-cash charges including $22.3 million of stock-based compensation expense, $2.4 million of provision of allowance for doubtful accounts, $1.1 million of amortization of debt discount and issuance costs, $5.3 million of depreciation and amortization, and $7.2 million in revaluation of our contingent royalty obligation.
We expect to continue to incur significant expenses for the foreseeable future as we increase marketing efforts for Jeuveau ® in the U.S., Europe, and Australia, pursue regulatory approvals in other jurisdictions and ready for commercial launch of the Evolysse™ Lift, Smooth, Sculpt and Eye dermal filler product line.
We expect to continue to incur significant expenses for the foreseeable future as we increase marketing efforts for Jeuveau ® in the U.S., Europe, and Australia, pursue regulatory approvals in other jurisdictions and ready for commercial launch of the Evolysse™ Form, Smooth, Sculpt and Eye hyaluronic acid gel product line.
Because of the numerous risks and uncertainties associated with research, development and commercialization of our products, we are unable to estimate the exact amount of our operating capital requirements.
Because of the numerous risks and uncertainties associated with research, development and commercialization of our products, we are unable to estimate the exact amount of our operating capital requirements, including our requirements beyond the next twelve months.
In addition, during the period from December 2020 to September 2022, product cost of sales, excluding amortization of intangible assets, also included certain royalties on the sale of Jeuveau ® payable to Medytox and Allergan pursuant to the Medytox/Allergan Settlement Agreements, partially offset by reimbursement receivable from Daewoong pursuant to the Daewoong Arrangement with respect to such royalties.
In addition, during the period from December 2020 to September 2022, cost of goods sold also included certain royalties on the sale of Jeuveau ® payable to Medytox and Allergan pursuant to the Medytox Settlement Agreements, partially offset by reimbursement receivable from Daewoong pursuant to the Daewoong Arrangement with respect to such royalties.
The increase was primarily attributable to increasing our clinical operations and research and development expenses related to the Phase II “extra-strength” clinical trial. We expect our research and development expenses to continue to increase if and when we develop further product candidates and as we pursue regulatory approvals in other jurisdictions.
The increase was primarily attributable to increasing our clinical operations and research and development expenses related to Evolysse TM . We expect our research and development expenses to continue to increase if and when we develop further product candidates and as we pursue regulatory approvals in other jurisdictions.
Market Trends and Uncertainties The global economy, including the financial and credit markets, has recently experienced extreme volatility and disruptions, including uncertainty regarding the stability of certain financial institutions, increases in inflation rates, rising interest rates, severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability.
Market Trends and Uncertainties The global economy, including the financial and credit markets, has recently experienced volatility and disruptions, increases in inflation rates, rising interest rates, new and threatened tariffs, severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability.
These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and our future market share in various jurisdictions. Symatese U.S. Agreement The Symatese U.S. Agreement includes certain milestone payments, development cost-sharing arrangements, and minimum annual purchases we are required to make in order to maintain the exclusivity of the license.
These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and our future market share. Symatese Europe Agreement The Symatese Europe Agreement includes certain milestone payments and minimum annual purchases we are required to make in order to maintain the exclusivity of the license.
For the year ended December 31, 2022, operating activities used $84.9 million of cash, which primarily resulted from our net loss of $74.4 million. Net operating assets and liabilities changed by $34.3 million, primarily driven by timing of receipts from customers and payments to vendors and the second cash litigation settlement payment of $15.0 million to Medytox and Allergan.
For the year ended December 31, 2023, operating activities used $34.0 million of cash, which primarily resulted from our net loss of $61.7 million. Net operating assets and liabilities changed by $5.9 million, primarily driven by timing of receipts from customers and payments to vendors and the second cash litigation settlement payment of $5.0 million to Medytox and Allergan.
Depreciation and Amortization Depreciation and amortization increased by $1.4 million, or 37.9%, to $5.1 million for the year ended December 31, 2023 from $3.7 million for the year ended December 31, 2022, primarily due to an increase in amortization of internal-use software and leasehold improvements.
Depreciation and Amortization Depreciation and amortization increased by $0.1 million, or 5%, to $2.3 million for the year ended December 31, 2024 from $2.2 million for the year ended December 31, 2023, primarily due to an increase in amortization of internal-use software and leasehold improvements.
Financing Activities Cash provided by financing activities was $44.6 million for the year ended December 31, 2023, compared to $4.1 million of cash used in financing activities for the year ended December 31, 2022.
Financing Activities Cash provided by financing activities was $47.4 million for the year ended December 31, 2024, compared to $44.6 million of cash provided by financing activities for the year ended December 31, 2023.
We had net loss of $61.7 million and $74.4 million in the years ended December 31, 2023 and 2022, respectively. We had a net loss from operations of $49.2 million and $65.3 million in the years ended December 31, 2023 and 2022, respectively.
We had net loss of $50.4 million and $61.7 million in the years ended December 31, 2024 and 2023, respectively. We had a loss from operations of $34.4 million and $49.2 million in the years ended December 31, 2024 and 2023, respectively.
We used net cash of $34.0 million and $84.9 million in operating activities for the twelve months ended December 31, 2023 and 2022, respectively.
We used net cash of $18.0 million and $34.0 million in operating activities for the years ended December 31, 2024 and 2023, respectively.
During the period from September 17, 2022 to September 16, 2032, we agreed to pay to Medytox a mid-single digit royalty percentage on all net sales of Jeuveau ® . The royalty payments are made quarterly.
During the period from September 17, 2022 to September 16, 2032, we agreed to pay to Medytox a mid-single digit royalty percentage on all net sales of Jeuveau ® . The royalty payments are made quarterly. Daewoong Agreement The Daewoong Agreement includes certain minimum annual purchases we are required to make in order to maintain the exclusivity of the license.
Product cost of sales, excluding amortization of intangible assets, increased by $5.7 million, or 10.1%, to $61.6 million for the year ended December 31, 2023 from $55.9 million from the year ended December 31, 2022 primarily due to higher sales volume, offset by reduced royalty obligations to Medytox.
Cost of goods sold, increased by $5.7 million, or 10%, to $64.5 million for the year ended December 31, 2023 from $58.8 million from the year ended December 31, 2022 primarily due to higher sales volume, offset by reduced royalty obligations to Medytox.
Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of $62.8 million, positive working capital of $64.1 million and stockholders’ deficit of $20.7 million. We began selling Jeuveau ® in May 2019 and have a relatively limited history of generating revenues.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $87.0 million, positive working capital of $88.4 million and stockholders’ equity of $5.5 million. We began selling Jeuveau ® in May 2019 and have a relatively limited history of generating revenues.
The first tranche of $75.0 million was funded on December 29, 2021. On December 5, 2022, we entered into a Second Amendment to the loan agreement to extend our option to draw down the second tranche of $50.0 million until December 31, 2023. In exchange for the extension, we paid an amendment fee of $0.5 million to Pharmakon.
On December 5, 2022, we entered into a Second Amendment to the loan agreement to extend our option to draw down the second tranche of $50.0 million until December 31, 2023.
Net operating assets and liabilities changed by $5.9 million, primarily driven by improved collections from customers, payments to vendors, the timing of inventory purchases from our supplier, and the final cash litigation settlement payment of $5.0 million to Medytox and Allergan.
Net operating assets and liabilities changed by $6.6 million, primarily driven by timing of collections from customers, payments to vendors, and the timing of inventory purchases from our supplier.
Investing Activities Cash used in investing activities was $1.6 million for the year ended December 31, 2023, compared to $2.9 million for the year ended December 31, 2022.
Cash used in investing activities was $1.6 million for the year ended December 31, 2023, compared to $2.9 million for the year ended December 31, 2022. For the year ended December 31, 2023, cash used in investing activities driven by the purchase of property, plant, and equipment and additions to capitalized software.
Consolidated Financial Statements and Supplementary Data - Note 7. Operating Leases. Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP.
Operating Leases in the Notes to Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP.
We expect elevated levels of cost inflation to continue, potentially impacting consumer 53 Table of Contents discretionary spending for aesthetic medical procedures. Markets experiencing uncertainty could have substantial high rates of inflation. We cannot reasonably estimate the financial impact of increased inflation on our financial condition, results of operations or cash flows in the future.
We expect elevated levels of cost inflation to continue, potentially impacting consumer discretionary spending for aesthetic medical procedures. Markets experiencing uncertainty could have substantial high rates of inflation.
The first tranche of $75.0 million was funded on December 29, 2021. We received net proceeds of approximately $68.7 million from Pharmakon, after issuance costs and debt discounts. On December 5, 2022, we entered into a Second Amendment to the loan agreement to extend our option to draw down the second tranche of $50.0 million until December 31, 2023.
The first tranche of $75.0 million was funded on December 29, 54 Table of Contents 2021. We received net proceeds of approximately $68.7 million from Pharmakon, after issuance costs and debt discounts.
Revenues are recognized when the control of the promised goods is transferred to the customer in an amount that reflects the consideration allocated to the related performance obligations and to which we expect to be entitled in exchange for those products or services. 54 Table of Contents Net revenues of Jeuveau ® sales increased by $53.5 million, or 36.0%, to $202.1 million for the year ended December 31, 2023 from $148.6 million for the year ended December 31, 2022, primarily due to higher sales volumes.
Revenues are recognized when the control of the promised goods is transferred to the customer in an amount that reflects the consideration allocated to the related performance obligations and to which we expect to be entitled in exchange for those products or services.
Cost of Sales Product Cost of Sales Product cost of sales, excluding amortization of intangible assets, primarily consisted of the cost of inventory purchased from Daewoong.
Cost of Goods Sold Cost of goods sold, primarily consisted of the cost of inventory purchased from Daewoong and amortization of intangible asset distribution right.
Agreement and Symatese Europe Agreement, respectively. See Note 2 . Basis of Presentation and Summary of Significant Accounting Policies for additional information. Revaluation of Contingent Royalty Obligation Payable to Evolus Founders 55 Table of Contents The change in the fair value of the contingent royalty obligation payable to Evolus Founders is recorded in operating expenses in each reporting period.
Revaluation of Contingent Royalty Obligation Payable to Evolus Founders The change in the fair value of the contingent royalty obligation payable to Evolus Founders is recorded in operating expenses in each reporting period.
These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and our future market share. Operating Leases Our corporate headquarters in Newport Beach, California is under a non-cancelable operating lease, which expires on January 31, 2030 with an option to extend the term for an additional 60 months.
Operating Leases Our corporate headquarters in Newport Beach, California is under a non-cancelable operating lease, which expires on January 31, 2030 with an option to extend the term for an additional 60 months. Lease payments increase based on an annual rent 55 Table of Contents escalation clause that occurs on each February 1 anniversary.
Basis of Presentation and Summary of Significant Accounting Policies-Recent Accounting Pronouncements. 61 Table of Contents
Basis of Presentation and Summary of Significant Accounting Policies—Recent Accounting Pronouncements in Part II, Item 8 of this Annual Report on Form 10-K . 59 Table of Contents
License and Supply Agreement The Daewoong Agreement includes certain minimum annual purchases we are required to make in order to maintain the exclusivity of the license. We may, however, meet these minimum purchase obligations by achieving certain market share in our licensed territories.
We may, however, meet these minimum purchase obligations by achieving certain market share in our licensed territories. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and our future market share in various jurisdictions. Symatese U.S. Agreement The Symatese U.S.
We have commercial launch plans in additional countries where we have regulatory approval that we expect to implement in the next few years.
We have commercial launch plans in additional countries which we expect to implement in the next few years. We are also actively pursuing the commercialization and further regulatory approvals of Evolysse™, a collection of injectable hyaluronic acid gels that includes mid face, nasolabial folds, lips and eyes.
Removed
We are also actively pursuing regulatory approval of Evolysse™, a line of hyaluronic acid dermal fillers, and anticipate obtaining regulatory approval of the Evolysse™ line of products in Europe in the second half of 2024 and in the United States beginning in 2025. Regulatory approval has already been received for the Evolysse™ nasolabial fold product in Europe.
Added
In October 2024, regulatory approval was received in the European Union for four products in the Evolysse™ line: Evolysse™ Form, Evolysse™ Smooth, Evolysse™ Sculpt and Evolysse™ Lips. In February 2025, we received approval from the U.S.
Removed
Jeuveau ® is a proprietary 900 kDa purified botulinum toxin type A formulation indicated for the temporary improvement in the appearance of moderate to severe glabellar lines, also known as “frown lines,” in adults. Evolysse™, a line of dermal fillers, is a first-generation cold technology hyaluronic acid line for products including mid face, nasolabial folds, lips and eyes.
Added
Food and Drug Administration, or the FDA, for Evolysse™ Form and Evolysse™ Smooth injectable hyaluronic acid gels for wrinkles and folds, such as nasolabial folds. We anticipate launching Evolysse™ Form and Evolysse™ Smooth in the United States in the second quarter of 2025. We also anticipate launching all four approved Evolysse™ products in Europe in the second half of 2025.
Removed
Recent Developments Symatese Agreements On May 9, 2023, we entered into a License, Supply and Distribution Agreement, or the Symatese U.S.
Added
We cannot reasonably estimate the financial impact of increased inflation on our financial condition, results of operations or cash flows in the future. 49 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the periods indicated: Year Ended December 31, (in millions) 2024 2023 Change % Change Revenue: Product revenue, net $ 264.3 $ 199.7 $ 64.6 32 % Service revenue 2.0 2.4 (0.4) (17) % Total net revenues 266.3 202.1 64.2 32 % Cost of goods sold 84.0 64.5 19.5 30 % Gross profit 182.3 137.6 44.7 32 % Operating expenses: Selling, general and administrative 198.0 164.9 33.1 20 % Research and development 9.2 6.6 2.6 39 % In-process research and development — 8.9 (8.9) (100) % Revaluation of contingent royalty obligation payable to Evolus Founders 7.2 4.3 2.9 67 % Depreciation and amortization 2.3 2.2 0.1 5 % Total operating expenses 216.7 186.8 29.9 16 % Loss from operations (34.4) (49.2) 14.8 (30) % Non-operating expense, net (15.3) (12.3) (3.0) 24 % Loss before income taxes: (49.7) (61.5) 11.8 (19) % Income tax expense 0.7 0.2 0.5 250 % Net loss $ (50.4) $ (61.7) $ 11.3 (18) % Unrealized loss, net of tax (0.5) (0.1) (0.4) 400 % Comprehensive loss $ (50.9) $ (61.8) $ 10.9 (18) % The following table summarizes our gross profit margin for the periods indicated: Year Ended December 31, (in millions) 2024 2023 Change % Change Total net revenues $ 266.3 $ 202.1 $ 64.2 32 % Cost of goods sold 84.0 64.5 19.5 30 % Gross profit $ 182.3 $ 137.6 $ 44.7 33 % Gross profit margin 68 % 68 % Net Revenues We currently operate in one reportable segment, and all of our net revenues are derived from sales of Jeuveau ® .
Removed
Agreement, with Symatese S.A.S (“Symatese”), pursuant to which Symatese granted to us an exclusive right to commercialize and distribute five dermal filler product candidates which we collectively refer to as Evolysse™, including the products we refer to as: (i) Lift; (ii) Smooth; (iii) Sculpt; (iv) Lips; and (v) Eye in the United States for aesthetic and dermatological uses.
Added
Net revenues of Jeuveau ® sales increased by $64.2 million, or 32%, to $266.3 million for the year ended December 31, 2024 from $202.1 million for the year ended December 31, 2023, primarily due to higher sales volumes.
Removed
We also have the right of first negotiation to obtain a license from Symatese for any new products developed using the same technology as the Evolysse™ line of dermal fillers. Evolysse™ Lift, Smooth, and Sculpt are currently in advanced stages of clinical trials pursuant to an investigational device exemption, or IDE, from the U.S. Food and Drug Administration, or FDA.
Added
We anticipate our continued sales growth will depend on our ability to grow our customer base and increase purchases by our current customers in the competitive aesthetic market as well as the success of the commercial launch of Evolysse TM Form and Evolysse TM Smooth products in the United States and the 50 Table of Contents Evolysse TM hyaluronic acid gel product collection in Europe, and on regulatory approval for the Evolysse TM Sculpt, and Lips products in the United States.
Removed
We have agreed to a cost-sharing arrangement with Symatese to gain FDA approval of the Evolysse™ Lips and Eye products. Subject to FDA approval, we expect Evolysse™ Lift and Smooth to commercially launch in the first half of 2025, Evolysse™ Sculpt to launch in 2026 and Evolysse™ Lips and Eye to launch in 2027.
Added
Cost of Goods Sold Cost of goods sold, primarily consisted of the cost of inventory purchased from Daewoong and amortization of intangible asset distribution right. In addition, cost of goods sold includes certain royalties on the sale of Jeuveau ® payable to Medytox related to the Medytox Settlement Agreements.
Removed
On December 20, 2023, we entered into a License, Supply and Distribution Agreement, or the Symatese Europe Agreement, pursuant to which Symatese granted to us an exclusive right to commercialize and distribute four dermal filler product candidates, which are referred to as: (i) Lift; (ii) Smooth; (iii) Sculpt and (iv) Lips in 50 countries in Europe for use in the aesthetics and dermatological fields.
Added
Our royalty obligations to Medytox are a mid-single digit percentage of net revenue through the expiration of our Medytox royalty obligation in September 2032. Cost of goods sold, increased by $19.5 million, or 30%, to $84.0 million for the year ended December 31, 2024 from $64.5 million from the year ended December 31, 2023 primarily due to higher sales volume.
Removed
Regulatory approval has been received for the Evolysse™ nasolabial fold product in Europe and the remaining three products are anticipated to be approved in late 2024. We will be licensing our neurotoxin, Jeuveau ® , to Symatese for distribution in France, marking the fifth European market that we have now entered.
Added
We anticipate that our cost of goods sold will fluctuate in line with changes in revenues until the expiration of our Medytox royalty obligation in September 2032. Gross Profit Margin Our gross profit margin was 68% and 68% for the years ended December 31, 2024 and 2023, respectively.
Removed
In addition, we will sub-license its distribution rights for the Evolysse™ fillers line to a Symatese subsidiary for distribution in France. “Extra-Strength” Clinical Trial 52 Table of Contents In November 2021, we announced the initiation of a Phase II clinical trial designed to investigate a higher strength dose of Jeuveau ® in the frown lines.
Added
Selling, General and Administrative Selling, general and administrative expenses increased by $33.1 million, or 20%, to $198.0 million for the year ended December 31, 2024 from $164.9 million for the year ended December 31, 2023, primarily resulting from increasing personnel costs and related to our commercial activities.
Removed
We completed our patient enrollment in the clinical study evaluating the “extra-strength” dose in the second quarter of 2022. This program provides us with the opportunity to offer the first multi-strength neurotoxin, giving customers and consumers increased treatment options.
Added
Selling, general and administrative expenses may fluctuate in the future primarily due to potential changes in marketing strategies and international launches. Research and Development Research and development expenses increased by $2.6 million, or 39%, to $9.2 million for the year ended December 31, 2024 from $6.6 million for the year ended December 31, 2023.
Removed
In June 2023, we announced the successful completion of the Phase II clinical trial and in November 2023, we presented the final results of the “extra-strength” clinical trial.
Added
In-process Research and Development For the twelve months ended December 31, 2023, we recorded $8.9 million of in-process research and development expense in connection with the Symatese agreements. See Note 2 .
Removed
The clinical trial data showed that the “extra-strength” formulation of Jeuveau ® had a similar safety profile to the controls and demonstrated a median duration of at least 26 weeks based on the time for patients to return to baseline after treatment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed6 unchanged
Biggest changeAs of December 31, 2023, we had $120.4 million outstanding on the term loan. We estimate that a 1% increase or decrease in underlying interest rates as of December 31, 2023 would increase or decrease annual interest expenses by $1.3 million. Foreign Exchange Our operations are primarily conducted in the U.S. dollar.
Biggest changeAs of December 31, 2024, we had $121.5 million outstanding on the term loan. We estimate that a 1% increase or decrease in underlying interest rates as of December 31, 2024 would not have a material impact on annual interest expense. Foreign Exchange Our operations are primarily conducted in the U.S. dollar.
The resulting gains and losses, which were insignificant for the years ended December 31, 2023, and 2022, are included in other expenses in the consolidated statement of operations and comprehensive loss. 62 Table of Contents
The resulting gains and losses, which were insignificant for the years ended December 31, 2024, 2023, and 2022, are included in other expenses in the consolidated statement of operations and comprehensive loss. 60 Table of Contents

Other EOLS 10-K year-over-year comparisons