Revance Therapeutics Inc (RVNC) 2020 Q4 法說會逐字稿

Welcome to the Revance Therapeutics Fourth quarter and Full Year 2020 Financial Results and Corporate Update Conference Call. (Operator Instructions) As a reminder, this call is being recorded today, February 22, 2021.

I would now like to turn the conference call over to Jessica Serra, Head of Investor Relations and ESG for Revance. Please go ahead.

Thank you, Faith. Joining us on the call today from Revance is President and Chief Executive Officer, Mark Foley; Chief Financial Officer, Toby Schilke; Chief Operating Officer and President of R&D and Product Operations, Dr. Abhay Joshi; Chief Commercial Officer, Aesthetics and Therapeutics, Dustin Sjuts; President of Innovation and Technology, Aubrey Rankin; and Senior Vice President, Clinical Development, Dr. Roman Rubio.

During this call, management will make forward-looking statements, including statements related to Revance's 2021 guidance, the clinical development of our product candidates, business strategy and planned operations, commercial launch of the RHA Collection of dermal fillers and HintMD fintech platform, the timing of any potential approval of DaxibotulinumtoxinA for Injection by the FDA, the market opportunity of our aesthetics and therapeutics franchises, milestone expectations and expected cash runway and financial performance.

These forward-looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. Factors that could cause results to be different from these statements include factors the company describes in the section titled Risk Factors in our quarterly report on Form 10-Q as filed with the SEC on November 7, 2020. Revance undertakes no obligation or obligation to update any forward-looking statements as a result of new information, future events or changes in its expectations.

Also on today's call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our earnings release. With that, I will turn the call over to Mark Foley. Mark?

Thank you, Jessica. Good afternoon, everyone, and thank you for joining our Fourth Quarter and Full Year 2020 Earnings Conference Call.

2020 was truly a transformational year for Revance. Our team more than doubled in size, we advanced both of our aesthetics and therapeutics pipelines and strengthened our balance sheet, extending our cash runway into 2024.

We also integrated HintMD, a next-generation point-of-sale payment and consumer loyalty platform for aesthetic practices that provides us with a diversified revenue stream.

This year culminated with our successful transition into a commercial entity as we launched the RHA Collection of dermal fillers and the HintMD fintech platform. These would all be significant accomplishments in a normal year, but even more noteworthy against the backdrop of the global COVID-19 pandemic. I'm incredibly proud of our team for coming together during these challenging times and delivering on our key objectives for the year.

Before I cover our fourth quarter highlights and milestones for this year, I'd like to review the results from our JUNIPER Phase II trial, DaxibotulinumtoxinA for Injection for adult upper limb spasticity, which we will refer to as adult ULS on this call. This is our second muscle movement disorder clinical program for DaxibotulinumtoxinA for Injection, and we are very pleased with the data from the Phase II study.

Before I pass the call over to Roman to review the study, let me talk a little bit more about upper limb spasticity. Adult ULS is a condition that affects movement in the arms and hands, making muscle stiff, flex and sometimes spasm. It is most often caused by stroke, disease or traumatic brain injury.

Although not life-threatening, it can be painful and debilitating, impacting a patient's ability to perform daily tasks. Botulinum toxin injections have shown to be effective and relieving many symptoms of spasticity, particularly when combined with physical therapy. Injections are typically administered by physiatrists and neurologists, who treat problems with the brain and nervous system.

Total spasticity, which includes upper and lower limb spasticity, is one of the largest of the muscle movement disorders, representing $620 million global opportunity in 2020 and expected to grow to over $1 billion by 2025. The prevalence of spasticity is estimated to be 12 million people worldwide. However, less than 20% of patients received treatment.

As with cervical dystonia, there are challenges with the currently approved botulinum toxins in the treatment of adult ULS. In present day practice, patients are typically injected every 12 weeks. However, patients often experience a return of symptoms prior to the approved treatment interval by payers. For these reasons, there is a significant unmet need in this patient population, similar to what is seen in cervical dystonia patients for a long-lasting and more cost-effective therapy.

We hope that DaxibotulinumtoxinA for Injection, once approved, would encourage a greater population of patients with this condition to seek treatment.

Now I'll pass the call to Roman to review the trial design and results. Roman?

Thank you, Mark. Our JUNIPER Study was a Phase II randomized double-blind placebo-controlled multicenter trial to evaluate the efficacy and safety of DaxibotulinumtoxinA for Injection for the treatment of adult ULS, following a stroke or traumatic brain injury.

The study was also designed to identify a dose to help us advance into a Phase III program. There were 3 doses of the drug evaluated, 250, 375 and 500 units compared with placebo. The trial was originally designed to include 128 subjects, but given COVID-19 concerns, we made the decision in June of 2020 to curtail the enrollment size to 83 subjects.

Our concerns were related to challenges with subject enrollment, the scheduling of in-person study visits and the lack of validated assessment for patients that could be used remotely. With the revised sample size of 83 subjects, we determined that the Phase II study design would still be adequate to meet the goal of identifying an acceptable dose with an efficacy and safety -- from an efficacy and safety standpoint to advance into a Phase III program, especially given the known performance profile of other neuromodulators in the treatment of this condition.

The study enrolled adult patients between the ages of 18 to 75 with moderate-to-severe upper limb spasticity at the elbow, wrist and finger flexors. We conducted the trial at 30 sites in the U.S., and patients were randomized 1:1 to 1:1 between active and placebo treatment groups.

The study was designed to run up to 36 weeks with 2 co-primary outcome measures. First, the main change from baseline in muscle tone at Week 6 that was measured with the Modified Ashworth Score, or MAS, in the most effective muscle group between the elbow, wrist or finger flexors, which was designated as the Super Hypertonic Muscle Group, or SMG. And second, the main score of the Physician Global Impression of Change, or PGIC, at Week 6. In addition, the duration of effect was evaluated as a key secondary endpoint.

We'll now turn to the JUNIPER results. On the co-primary endpoints at Week 6, the proof-of-concept was demonstrated with all 3 doses being numerically higher than placebo as measured on the MAS. The 500 unit dose was able to demonstrate a meaningful and statistically significant reduction of muscle tone on the MAS from baseline compared with placebo. Additionally, each of the 3 doses was able to demonstrate a numerical improvement when compared with placebo on the PGIC assessment. However, this difference was not able to reach statistical significance with the reduced enrollment size. That said, we were pleased and encouraged to see the treatment effect with our data aligned with prior studies that were with Type A toxin in adult upper limb spasticity.

A key secondary endpoint for DaxibotulinumtoxinA for Injection was the duration of effect. In published literature that has been reported with other toxins, symptom relief usually peaks at 4 to 6 weeks with efficacy that will wane in the -- in that range with a duration that's been reported of 12 to 14 weeks.

In our JUNIPER Phase II study, all 3 doses of DAXI for Injection achieved a median duration of at least 24 weeks that was defined as a time from injection in weeks until a loss of muscle tone improvement as measured by the MAS for the super hypertonic muscle group and the PGIC with a score of less than or equal to 0 or a request for retreatment by the subject.

Finally, in terms of safety. DaxibotulinumtoxinA for Injection was found to be generally safe and well tolerated across all 3 doses with no increase in the incidents of adverse events observed in the higher dose treatment groups. In summary, the study successfully was able to deliver the data that was required to properly design a Phase II program. We were able to meet the co-primary efficacy endpoint as measured on the MAS, even though a lower subject enrollment size was had secondary to COVID-19.

We also showed the consistent long duration profile for DAXI of 24 weeks as seen across our other therapeutic and aesthetic studies.

For this -- for these reasons, we are confident in the drug's ability to be able to significantly improve patients' quality of life by achieving symptom relief with as few as 2 treatments per year potentially. We plan to share the JUNIPER Phase II data set at an upcoming Medical Congress.

In closing, we could not have achieved these results without the time and commitment of the patients, investigators, CROs and members of the Revance team to the JUNIPER program. We thank you all.

I'll turn the floor back over to Mark.

Thanks, Roman. To echo Roman's remarks, the JUNIPER Phase II trial was modified and completed under extraordinary circumstances and delivered the results that we needed in order to advance our program. We plan to schedule an end of Phase II meeting with the FDA prior to finalizing our Phase III program.

As to the rest of our therapeutics franchise, the next milestone is the completion of the ASPEN-OLS Phase III open-label safety study in cervical dystonia, expected in the second half of 2021. We plan to follow this with a regulatory filing with the FDA in 2022 and anticipate approval in 2023.

We're very pleased with the positive momentum in our therapeutics franchise, given the growing body of clinical evidence that further validates the differentiated performance profile of DaxibotulinumtoxinA for Injection. This differentiation will allow us to effectively participate in the global muscle movement disorder market, which includes cervical dystonia and spasticity, representing a $1 billion opportunity today.

We continue to believe that the demonstrated, long-duration, favorable safety profile and high response rates of our next-generation neuromodulator could become the new standard of care for neurological muscle movement disorders. Longer duration of treatment effect also delivers meaningful pharmacoeconomic benefits, including decreased annualized drug costs, decreased health care utilization and a reduction in overall treatment costs. Altogether, DaxibotulinumtoxinA for Injection has the ability to potentially expand the utilization of neuromodulators for patients with these debilitating conditions.

Now I'll turn to our performance for the fourth quarter. In our first full commercial quarter, we saw strong uptake of our RHA Collection and substantial growth in processing volume from our HintMD platform. Our initial results were encouraging for 2 reasons. First, it shows that our innovative and differentiated aesthetics portfolio is resonating with consumers and health care providers. And second, it reflects that our thoughtful and disciplined commercial strategy was successful in producing results.

During the fourth quarter, we also announced positive results from our Phase II open-label upper facial line study, which further reinforced the favorable duration profile of DaxibotulinumtoxinA for Injection. The study showed efficacy of none or mild wrinkle severity in at least 92% of subjects at Week 4 for the combined treatment of glabellar lines, forehead lines and crow's feet lines.

Further, the median time to return to baseline wrinkle severity was at least 33 weeks or 7.6 months. We hope that in the fourth quarter, we would secure FDA's approval of our innovative, long-lasting neuromodulator DaxibotulinumtoxinA for Injection in the treatment of glabellar lines. However, as we announced in November, the BLA for glabellar lines remains in review due to the FDA's inability to conduct a mandatory inspection of our manufacturing facility as a result of COVID-19 travel restrictions.

You will recall, we announced that the FDA did not indicate any further outstanding review issues beyond the pending on-site inspection. That said, we remain confident in the quality of our BLA submission and are hopeful for an approval in 2021.

In the meantime, we continue to build traction in our aesthetics platform with the RHA Collection and HintMD platform, which will provide a strong foundation for the commercial launch of DaxibotulinumtoxinA for Injection once approved.

Now let me turn the call over to Dustin to talk about the performance of our aesthetics business in the fourth quarter.

Thank you, Mark. We are extremely pleased to see the early results of our aesthetics commercial launch with the RHA Collection and the HintMD fintech platform. The resilience of the aesthetics market and a V-shaped recovery are encouraging as we look to gain market share.

Practices have adopted to the new normal and are adjusting their operations within the COVID environment to provide services to their patients. We're seeing more practices, leveraging technology to conduct virtual patient consultations, while overall demand for aesthetic procedures continues to be healthy.

Total RHA sales for the fourth quarter exceeded our internal expectations, totaling $10 million. For the full year, product sales were $12.9 million. While we are still early in our commercial launch, we are seeing solid productivity from the accounts that are adopting RHA with strong reorder rates and a growing share of wallet within these accounts.

We continue to be disciplined in our account selection, focusing primarily on prestige accounts that value patient outcomes and experience over discounts.

Through REVANCEU, we're making great progress in educating and training our target customers. Despite the evolving COVID landscape, our team has been able to leverage different forms of face-to-face training in all markets as well as a robust virtual training program, utilizing highly experienced trainers from across the globe to provide an interactive training experience.

During the third quarter, we also launched the RHA -- during the quarter, we also launched the RHA Collection flawless in motion campaign. The campaign educates consumers about our innovative hyaluronic acid, or HA, dermal fillers that address 2 primary consumer values, the desire for a natural look and clean beauty. It highlights the RHA collection as the only FDA-approved HA filler, designed for the correction of dynamic wrinkles and folds.

The filler is also prepared by a gentle manufacturing process that preserves the natural structure of the HA helping it resemble the natural HA found in the skin.

We also executed social influencer campaigns and targeted digital media campaigns across channels with the goal of driving consumers to the practices that carry the RHA collection.

Turning to HintMD. We gained traction and expended processing volumes to an annualized run rate of over $200 million in Q4. We believe these results demonstrate both the resilience of the aesthetics market as well as the synergies created with the RHA Collection.

With our current focus to add value to practices through payment processing and touch-of-smart payments, we are progressing our plans to release the next-generation of HintMD in mid-2021 with vertical PayFac integration and additional features.

Altogether, our field force doubled our aesthetic accounts across RHA and HintMD from the third quarter. We ended the year with over 1,000 accounts combined, which we expect to grow over time under our prestige strategy. In preparation for the anticipated FDA approval for our next-generation neuromodulator, DaxibotulinumtoxinA for Injection in glabellar lines, we continue to build out and test the infrastructure, operations and back-office support to ensure a smooth launch upon approval.

Successful launch of the RHA Collection has paved the way for a strategic investment of resources to ensure that the onboarding and integration of our next-generation neuromodulator into the practice will be smooth.

The aesthetics foundation that we are laying today, along with the positive Phase II upper facial line study, will undoubtedly serve as a strong launch pad for DaxibotulinumtoxinA for Injection upon approval. Further Premarket Approval Application, or PMA, for RHA 1 for perioral lip lines has been submitted to the FDA by our partner, TEOXANE SA. They're anticipating an approval in the second half of the year. Once approved, RHA will be a great addition to our collection.

While we are still early in our launch in continued uncertain market conditions, we are encouraged with our market inroads and incredibly proud of what all of our commercial team has accomplished. We remain focused on our long-term growth prospects in a thriving aesthetics industry.

Now I'll turn the call over to Toby to cover the fourth quarter and full year financials.

Thanks, Dustin. The earnings release we issued today outlines our financial results in full. So I'll touch on the highlights on this call.

Total revenue was $15.3 million for the full year 2020. The breakdown for full year revenues was $12.9 million from the RHA Collection, $2 million from our Viatris partnership and $0.4 million from the HintMD platform, an acquisition, you will recall we closed on July 23, 2020.

GAAP operating expenses were $288.5 million for the year. Excluding RHA-related in-process R&D, stock-based compensation, depreciation and amortization and cost of revenue, non-GAAP operating expenses were $225.8 million for the year. Both were in line with our previously announced guidance.

Cash, cash equivalents and short-term investments as of December 31, 2020, were $436.5 million, which we believe is sufficient to extend our cash runway into 2024, underlying our current operating plan. We are very pleased to be in the strongest cash position in our company's history, supported by our first product revenues and successful financings, including proceeds from our ATM facility.

In terms of outlook, 2021 GAAP operating expenses are expected to be in the range of $375 million to $390 million compared to our non-GAAP operating expenses range of $270 million to $285 million. As a reminder, non-GAAP operating expenses exclude cost of revenue, depreciation and amortization and stock-based compensation. We expect 2021 non-GAAP research and development expense, including HintMD, to be $95 million to $105 million. In terms of future revenue, we do not feel it is prudent to provide guidance given the early stage of our RHA Collection and HintMD platform launches and the continued uncertainty fueled by the COVID-19 pandemic.

Finally, Revance's shares outstanding as of February 12, 2021, were approximately 71.4 million, with 76.5 million fully diluted shares, excluding the impact of convertible debt.

With that, I'll turn the call over to Mark.

Thank you, Toby. We believe that our strong financial position and innovations behind our aesthetics and therapeutics franchises will enable us to be a formidable competitor in the established markets that we enter. To that end, we look forward to building on the progress we made in 2020 by continuing to invest in innovation and unlocking additional value for our shareholders in 2021.

Before I conclude, I want to note that we published our first ESG report earlier this year, which detailed our commitments and efforts to build strong corporate governance and operate sustainably and responsibly.

This is an important pledge by the entire Revance team and our Board of Directors to further our efforts in building long-term value for all of our stakeholders, particularly as we enter the commercial stage of our evolution. We look forward to advancing our ESG program in the years ahead.

On that note, I'd like to highlight our latest governance update. Earlier today, we announced the addition of 2 new independent directors, Olivia C. Ware and Carey O'Connor Kolaja, to our Board. Olivia brings deep experience across commercial, clinical development and portfolio management from leading firms, including Principia, CytRx, Genentech and Baxter.

Carey is a recognized thought leader and executive in the fintech and payment space, having served as the Global Chief Product Officer at Citi Fintech and Vice President of Global Consumer Products at PayPal. Their backgrounds and experiences will be invaluable to our Board and organization as we advance our growth initiatives.

In that press release, we also announced that 2 of our long-standing directors, Phyllis Gardner and Bob Byrnes, have decided to retire from the Board and not stand for reelection at this year's Annual Shareholder Meeting. The announcement is consistent with our new 12-year director tenure policy that aims to facilitate board refreshment while also enhancing diversity.

Both Phyllis and Bob have served on the Revance Board for over 15 years and have made invaluable contributions to the organization all along the way. In particular, they played pivotal roles in guiding Revance through our clinical development, financings, IPO, and more recently, our commercial debut. So on behalf of the entire organization, I want to express our sincere gratitude to Phyllis and Bob for their service and contributions to Revance.

With that, I will now open the call up for questions. Operator?

(Operator Instructions) Your first question is from Ken Cacciatore from Cowen & Company.

Congratulations on all the continued progress. So just a couple of questions. The first, understanding you don't want to nuance too much on revenue guidance, but can you help us with the fillers concerning is there any buy in? I know there was nice commentary about good reorder pattern. But as we think about first half of the year, should we be thinking of a little bit of a step down before you reload and kind of regrow off of the Q4 level? Just any nuance, if you can help us there, so we don't get too far over our skis.

And then wondering on the DAXI kind of regulatory communications. Obviously, we're waiting for the inspection. But I don't know, Mark, if you'd be willing to talk about any kind of labeling discussions or give us any nuance about the communications at that level as we wait for that to be finalized?

And then lastly, I just wanted to ask strategically, obviously, wonderful progress on the therapeutic side of the fence, and we're going to continue to invest behind them. Can you talk about the balance between maybe looking to partner those assets versus you wanting to keep them whole? Obviously, you have kind of wonderful both aesthetic side and the therapeutic side, but how do you balance these 2? Is it -- are we going to keep investing try to keep them whole or are you thinking about maybe starting to talk about or think about licensing?

Yes. Ken, this is Mark. So let me kind of walk through the different questions. So first one on revenue cadence on the filler line. As you're aware, we're 1 quarter into our launch. And I think that's part of the reason we'd said we're not in a position to give guidance yet just because we're only 1 quarter in. And obviously, we've got seasonality.

Q4 historically is a big quarter, partly because of consumer demand and partly because of year-end programs that are designed by some of the large companies to incentivize purchases. And then you've got, obviously, COVID that's going on. And on top of that, you think you had that 1 week out of the quarter where some of the country was shut down due to cold temperatures. I paint all of that because we just think we're early in this process to really fully understand launch trajectory and the patterns, but we're obviously really encouraged with how it's going.

And so on the positive side, we're launching a brand-new product in a very targeted fashion. I think it's just a little premature, and I understand that you're trying to figure out how to build your models and what to put there. But I think we're still a little bit away from being able to give numbers with a little bit more confidence there. So stay tuned on that, but we are encouraged by what we're seeing in the marketplace.

I will say one other thing that we found is that procedure volumes are encouraging. We're definitely seeing a V-shaped recovery and good volume. Access to accounts can be a little bit more challenging. In more traditional times, you can see reps sort of swinging by accounts unannounced, checking in. That engagement has become a little bit more regulated as accounts are sort of focused internally and they have some things that they're working through in terms of staff and access to schools and those sides of things.

And so I think we're just early. Again, we're really encouraged by what we're seeing in the launch trajectory and the validation of the strategy. So as we have kind of more data points that we can rely on, we'll certainly share those.

On the DAXI regulatory side, as you're aware, in Q4, we got out in front of our PDUFA date of November 25, and indicated that an inspection had not taken place. And the reason we did that is we broke with tradition of commenting on where we are in the regulatory process because given the unique environment with COVID-19 and the inability for the FDA to do inspections, we knew that with this date coming up, we weren't going to hit it. We then moved into sort of the deferral category where there's no statutory time frame. And we think, frankly, it's prudent for us to go back to typical company policy and not comment on where we are there.

You asked the question about where are we at other aspects of the overall review. In November, we did indicate that the FDA didn't indicate that there's anything outstanding other than the actual facility inspection. So we are excited to get the product on the market as soon as possible, but we're going to revert back to prior company policy and not comment on the specifics there.

And then lastly, on the therapeutics side of it, like we're obviously very encouraged by what we continue to see out of our therapeutics pipeline. I think that with each additional clinical trial program that we run, we continue to see a very consistent duration of effect of our neuromodulator and very encouraging kind of safety and efficacy profile.

So I think that what we've messaged earlier is that we wanted to get through what was a pretty heavy phase of clinical data readouts. Certainly, now that we've got the Phase II adult upper limb spasticity data in hand, we're going to circle back up and spend more time addressing kind of the question you raised, do we partner this out? How do we think about this overall? We've obviously got capital allocation and other decisions that we need to work our way through. So more to come there. But certainly, with the data that we've generated, we think it opens up sort of a lot of optionality for us as we look ahead and try and figure out the best way to drive shareholder value.

Your next question is from Seamus Fernandez from Guggenheim.

So just a couple of questions. First, on the upper limb spasticity opportunity, can you just help us understand the dose that you're most likely to select going forward and where you have the highest conviction?

It sounds like it's more the size of the study, but certainly the 500 being statistically significant, while the others were not. I mean that could be variability or it could just be the effect size. So just love to get a little bit more color on how we should be thinking about the dose going forward and the magnitude of effect, obviously, 6 months, very positive, especially in this disease setting.

And then the second question, Mark, I just want to -- you've spoken about the HintMD and the contribution that HintMD can actually make to the overall organization, just hoping that you could help us understand a little bit how this program and this effort is going to advance through the balance of the year with -- as, obviously, the other capabilities start to come online, just hoping you could walk us through some of those incremental capabilities that would be coming online and what you feel they do for the overall aesthetic organization?

Thanks, Seamus. So the first one as it relates to dose, clearly, we ran this largely to inform our dosing strategies, we would move forward into a Phase III program. The other nice thing is, this is a market that's fairly well characterized. I mean there's competitor products that are in the market. There is extensive literature to look at, and we obviously benefit from the historical clinical trial programs that we have.

So as you noted, the 500 unit dose that show statistical significance, we think that, along with the other information that we have from the trial, will provide us sort of with the necessary background that we need to advance into a good Phase II -- end of Phase II meeting with the agency. And again, I think over time, too, we've got a much better appreciation for kind of core active neurotoxin in our product versus others and how those relate.

As you mentioned, we did reduce the size of the study for all the reasons that Roman mentioned. Certainly, patient recruitment was challenged, follow-up was challenging. But we felt that by truncating the study that we would still have adequate information to inform the next step. So I think it's more to come. We want to have that end of Phase II meeting before solidifying a dose. But as we highlighted, certainly the 500-unit dose was the one that showed statistical significance in one of the co-primary endpoints.

In terms of the HintMD contribution, let me just kind of maybe reframe it again. When we got into this, we talked about this payment platform. It's having the ability to participate in the overall credit card margin that's generated on every transaction. And that margin is kind of 2.4% to the low 4% on any transaction where there's a credit card use.

What would impact that sort of wide spread is, is it Amex? Is it Visa? Do they have the credit card with them or is it sort of card not present where somebody gives their credit card number over the phone, and that carries with a little higher fraud risk, which is why those rates swing? We participate in 50 to 100 basis points of that overall transaction. So that's our market opportunity.

Once we -- in part of our integration planning and our strategic exercise, when we did the modeling, we sort of recognized that there was going to be sort of a rebasing of the business when we acquired it because there were things that they were working on that were a little bit outside of our initial strategic focus.

And so we've worked our way through that. Over the last period of time, our primary focus has just been on processing transactions and allowing for remote or contactless payments, particularly in this COVID environment. So that's kind of our Phase I.

The next step, and we talked about it in our prepared remarks, is becoming what's called a payment facilitator. We expect that to happen kind of mid of this year, so mid-2021. And once we become a payment facilitator, we'll have much better access to the source data, which will be easy for us to turn on some of the other programs that we've historically talked about, subscriptions, white-label loyalty, better insight for data analytics for practices and even some other partnering opportunities.

So right now, the primary value proposition for the platform is really -- is it competitive from a pricing standpoint? And do they see value in remote or contactless payments? And then, hey, did they want to start to lean in with us as a company? As we start to turn on these other services middle of the year, we think that we're going to be able to add incremental value. We think that subscriptions are going to show practices how they can generate more profitability and better patient retention same with loyalty programs and then any kind of partnerships that we do.

So when we start to roll these out in the summer, we think that the overall HintMD platform is going to be much more compelling from a value add. From an overall margin contribution, we still have some work to do to figure out whether or not, as we turn on these services, we're going to increase sort of the fee that we charge and, therefore, enhance our profitability or will we turn around and reinvest that in the practice to reward product purchases and others.

And so there's still -- we need a little more time before we're comfortable sort of signaling the way we're going to go, but we're excited about sort of this next-generation of the product platform this summer.

Your next question is from Terence Flynn from Goldman Sachs.

Maybe 2 for me. Dustin, I was just wondering if you can give us any perspective on kind of what you're seeing early in the year here, January, February, maybe to relative to what you saw in December? And you noted you're pleased with your share of wallet at this point, maybe you could elaborate a little bit more there.

And then, Mark, on the DAXI inspection, recognizing you're not going to say a lot, given the ongoing communications with regulators. But as we look at the year, would you recommend we anchor to kind of a fourth quarter launch or midyear? Just trying to think about as you kind of level set everybody here on pacing of that DAXI launch, what would you recommend?

Terence, it's Dustin. I'll start a little bit on the January/February side. We really haven't seen much of a difference between today versus kind of Q4. I think in the market, you'll find there is a lot of programs that Mark talked about in terms of consumer-driven programs and coupons as well as almost like those frequent flyer programs that the big companies have that are trying to drive these end-of-the-year large purchases that has, at times, have impact on an account ability to say, am I wanting to take on a new account or I don't want to take on a new product today. And so the good thing is we have different accounts in different time periods. You've got some that are utilizing our training materials and really getting up to speed with how that product works. We've got some that are fully integrating RHA into their practice, which we'll talk about in a second from the share of wallet. And we've got others that are starting with the samples and the demonstration product. So we feel good about having an offering for folks that are different buying periods today. And there's lots of those opportunities out there.

From a share of wallet perspective, what we found is when we're first launching -- remember, we're the first company that has launched with all products at one time. So we launched with RHA 2, 3 and 4. So 3 different SKUs that all have different profiles that provide for that physician that flexibility for how they want to utilize the product. And so we've shown that once they get confident with the range that we're not just seeing one hero product come in, they're coming back and they're using all 3 of those products. We feel really good. Once they get it into their practice, they continue to grow the product.

So with that, I'll turn it over to Mark on the other question.

Yes. So Terence, in terms of timing for DAXI, again, I think that given that we're not able to make comments or have chosen not to because of prior company policy and history, we're not really able to share a whole lot of insight in terms of how to think about guiding you to it. So clearly with the whole deferral category and no set timing, we're just -- there's not a whole lot more that we're able to offer on that side of it.

But we -- again, we continue to feel great in terms of what we're doing with RHA line of fillers and our ability to broaden our footprint in the market, combined with our Hint platform. And we're just excited and looking forward to getting that product into the market as soon as possible.

Your next question is Annabel Samimy from Stifel.

I was wondering if you can give us a little bit more granularity on the launch. I think you had mentioned you had reached about 500 accounts in the third quarter. And so this quarter, have you grown that account base or was the growth primarily on reorder rates?

And given the good reception, is there any thought to further broadening the reach to new accounts or changing strategy, especially in light of DAXI being delayed, AbbVie, I guess, doing further investment in innovation on the filler side and you're having singular focus on RHA right now. Do you have any opportunity there to really lean into that and broaden that?

And then separately, on upper limb spasticity, I know that you had cited that the safety and tolerability was good. No specific AEs. But on the cervical dystonia, you showed significant or not significant, but actually meaningful improvement on some of the AEs that were problematic for cervical dystonia. Did you notice any of that for upper limb spasticity just based on your formulation, potential better targeting of the neuromodulator?

Thanks, Annabel. So let me try and run through them. So first off, we talked about at the end of Q3 being in roughly 500 accounts. Q4, we said that between both Hint and RHA, we're in roughly 1,000 accounts. So clearly, our growth is going to come from a combination of reorder rates of existing accounts and new account adds.

We're trying to be very disciplined in our strategy. We're introducing this as a prestige or a premium category for those accounts that see value in the program around this, not just the products, but we obviously have a lot of conviction in the products as well. But so we are targeting a subset of the overall aesthetic market.

Historically, we talked about it being sort of the top end of the pyramid. Roughly 1/3 of accounts are representing our target, but we want to be very measured with that approach. So kind of leading into your strategy of change. Any change around that? No. I mean, we continue to be very focused. We think this is the right strategy for us, both for the filler and for the neuromodulator side of things. And so we continue to be very disciplined with that approach.

And since Q4 was our first full quarter of launch, again, we're very early in terms of understanding reorder rates and dynamics. But even in the absence of DAXI, if you think about it, we originally thought we would have the RHA filler line on the market in April of last year, that got pushed to September because of COVID delays from our manufacturer. And so we're continuing to focus on the launch and delivering the products, the RHA filler line into the same accounts. And as we talked earlier, I think that the better job we do there, we're laying a great foundation for our neuromodulator once approved.

On the ULS side of it, in terms of comparing it to CD, I mean, first off, the CD trial that we reported out was a Phase III program. So much larger in scale than this sort of reduced Phase II study. In CD, obviously, one of the areas that generates a lot of concern is dysphasia because if you inject too much and patients have a difficulty in swallowing, that can be a challenge. We were encouraged, obviously, by the data that we were able to generate.

I think on the CD side of it, we -- I mean, on the ULS side of it, we saw a very clean safety profile, that's very consistent. I'll throw it over to Roman. Roman, I don't know if you want to add anything else there on the safety side?

Yes, sure. So as Mark mentioned on the cervical dystonia side and the ASPEN study, if we look at comparator trials, the dysphasia rate was in the mid- to high teens, and we were able to demonstrate a similar -- in the same category dysphasia, an adverse event rate that was in the single digits. So approximately 4%.

Unlike cervical dystonia and upper limb spasticity in adults, the adverse event rates across categories were already low.

The AE rate of interest that would be an analog to dysphasia is weakness of the muscle. And there, they have adverse event rates. If you look at the other product inserts of the low single digits -- low to mid-single digits, and we were very pleased to be able to have safety results that were also very strong in terms of low adverse event rates, including muscle weakness. So I would say consistent in terms of what's been reported in the literature and equally low.

Your next question is from Balaji Prasad from Barclays.

Maybe firstly, a question on DAXI itself, while I appreciate that approval launch looks while away. Have there been any conversations with this additions about COVID being a fundamental shift in how aesthetics is provided, especially talk since patients or consumers not wanting to be visiting clinics frequently or not wanting to be in close proximity with the providers? And how much of a tailwind could this be for DAXI when it eventually comes on to the market? Would it be a question of the right product at the right time?

So Balaji, I think on that, I mean, overall -- and again, if we look, for example, at the HintMD platform where we see some of the different volumes coming through the accounts, injectable volumes have been actually pretty good. There's no doubt that there are some markets that have been more impacted than others that have seen a more challenged recovery due to either consumers being less willing to engage or frankly some kind of getting out of the area. But I think by and large, since the first shutdown occurred, a lot of these aesthetic practices have figured out how to operate in this environment through social distancing and safety protocols.

And I think since a lot of consumers aren't traveling as much and are home and are looking at themselves on Zooms all day, people are finding ways to kind of get into their practices to get treatment. What has changed, as I mentioned, is I think the willingness of some of these accounts to engage with industry more broadly. Again, they're just sort of the drop-by, drop-in, they want things to be a little bit more scheduled and just so that they can ensure that the right kind of environment there.

I think to your question around would we see some sort of pent-up demand coming out of this once sort of -- people are immunized and we've reached some level of herd immunity, I certainly could see that, right? I think that we believe that the underlying trends that existed pre-COVID will continue to prevail with younger people engaging, people that are living longer and wanting to retain sort of the best version of themselves, want minimally invasive treatment. So we really like the overall growth characteristics of this market and would expect that we will see some pent-up demand.

I don't know, Dustin, if you want to add anything to that?

I think you mentioned tailwinds, I think we see tailwinds because of the lack of innovation in the market for so long, right? So while COVID is an environment that we look at, Balaji, I think people want treatments that last longer. We've shown that study and study again, both done internally and externally, as you've shown. So we're excited to get it out in the market to give people an option for longer-lasting treatment.

So we do think there's tailwinds, whether they're relative to COVID or not, I can't say, but people are ready for Daxibotulinumtoxin, for sure.

Great. Maybe a couple of other minor follow-ups. What's the latest update on biosimilar BOTOX? What stage are in? Has there been any progress during the quarter? Secondly, also maybe in terms of fillers itself, could you give us a sense of how many accounts you could plan to hit this year or reach this year?

So on the biosimilar, why don't I put it over to Abhay, and he can comment on that?

Yes. Thanks, Balaji. So I do know that for a biosimilar, we are in a partnership with Viatris formerly called Mylan. That program is in the early development stage, and it's under collaboration with the 2 teams and progressing very nicely.

And in terms of number of accounts, again, we're -- I just don't think, Balaji, we're in a position yet where we can give you that level of granularity. I think we're being very measured, we talked about having roughly 100 reps out there. We talked about we're targeting the top 1/3 of the market. We want to make sure that we are focused on those accounts that we think see value in a prestige product offering, that see value in the pricing strategy that we put in place.

And so we're going to be -- we're much more focused on being measured and going deep versus wide. And certainly, as we get data points that we have conviction behind, we'll be happy to start sharing those with you.

Your next question is from David Amsellem from Piper Sandler.

So just a couple. First, on the ULS program, can you just talk about, I guess, the rough contours of what a Phase III program would look like, particularly in terms of the primary outcome measures and how that might differ from what you did in the Phase II? And I apologize if I missed that, but wanted to get some granularity on that.

And then secondly, in other therapeutic settings, I know, Mark, we've talked about migraine in the past. Any new color or thinking on your development plans for DAXI in migraine? And when we may get an update there?

Sure. For the first question, why don't I hand it over to Roman? He will answer your question around Phase III.

Sure, Mark. So in terms of the Phase III design, there are a few important points to consider. The first is relative to the primary endpoint, in a similar way that other sponsors have landed on a co-primary endpoint that's based upon one objective and another subjective endpoint, namely Modified Ashworth Score on the objective side and an assessment of improvement on the functional side or the subjective side, in our case, it's a PGIC or the Physician Global Impression of Change. We would also, just like we did in Phase II, use those same 2 co-primary endpoints in discussion with FDA, and that would be our proposal.

In addition, in terms of the overall design of the study, we would be looking to continue to evaluate the safety, but also the efficacy in terms of duration. So we would want to continue to follow patients all they way up to 36 weeks so that we can fully evaluate the long duration of our neuromodulator in this indication.

Yes. Just to add on that, Dave, we would expect these to be 2 Phase III programs, along with an open-label safety study. Those would be kind of the driving assumptions in this. And then the details, obviously, would be discussed as part of our end of Phase II meeting with the agency. So stay tuned, more on that later as we move forward.

Then in your question on migraine, I think this falls in that overall bucket of our therapeutic strategy and platform. Clearly, we're furthest along in terms of the muscle movement disorder. The nice thing about that is both CD and adult ULS align around a central point in neurology. So it's very focused and targeted. And with the CD approval expected in 2023, that starts to move from being more of a commercial program to around the corner to a commercial program -- from a clinical to a commercial program.

Clearly, we recognize and see the value of the migraine market. It's a very large market. And as we kind of work our way through this data and this analysis, we'll be spending a lot of time working our way through exactly how much do we do internally? Do we partner any of it? How do we think about that long term?

What I will say is the thing that we really like about our neuromodulator product is that it is sort of a pipeline and a product, right? We can continue to access and turn on new markets as we invest in it. And we just got a balance sort of those investments in a way that we think is thoughtful, where we can make sure that we execute and deliver on the commercial line of things while still having a really nice pipeline. So as we have more and we work our way through the details of the therapeutics platform, we'll share that with you.

Your next question is from Jacob Hughes from Wells Fargo.

Most of my questions have been answered, but I just had a follow-up on the filler launch. I think you had a partial launch in the third quarter, and we saw what the numbers are in the fourth quarter. I think the aesthetic market has started to open up since then. So I mean, are you able to parse out any COVID-related impact as we think about the first half of this year?

And then also, longer term, I think TEOXANE had high single-digit or low double-digit share in Europe without a neurotoxin. So how are you thinking about the share now as you bet in the market?

Yes. So great question. In terms of the TEOXANE share and ownership, I don't think anything's fundamentally changed. Clearly, COVID has created some additional challenges in the marketplace in terms of practices being able to be open and see patients whether or not patients are comfortable going into the practice. And then as we mentioned earlier, some practices sort of restricting or limiting industry in an attempt to kind of control that environment.

So we think that as we come out of this that our ability to continue to drive our own share will kind of revert back to where it was pre-COVID and just a question of where it gets here. In terms of the overall filler launch, again, it's hard to make any broad statements here, partly because we're very targeted in our launch, right? We are in 20,000 accounts where you can make some general statements about the market. We've got -- we definitely have some headwinds in terms of -- you've got COVID, access is a little harder. You've got some quarter-over-quarter seasonality, that's different. Q4 being big, Q1 being sort of the lowest quarter, but we're also in a launch phase, right? And so we're opening up new accounts as we move forward, which in some way, allows us to mitigate some of those challenges in the market.

But since we're only 1 quarter in, I think it's just really hard for us to make any commentary or statements that are overall representative. I think we need a little bit more time to, again, gather sort of reorder rates and profile. Again, we're very committed to the strategy of being targeted versus just trying to open up any account. We continue to think it's the right strategy.

So Jacob, as we have a little bit more color and clarity into this, we'll certainly be sharing some of that.

Yes. I think the only thing I would mention is that we really are getting strong feedback on the clinical profile of the products, not just one, but all 3 of those products. And I think that speaks to the foundation that TEOXANE was able to generate outside the United States depending on market share, what have you, but it means that it can clinically stand up on its own, and we're seeing that in the U.S. as well, too.

So that gives us a lot of great foundation to now couple around with that clinical foundation, the training, the marketing efforts and then the portfolio products with HintMD and eventually Daxibotulinum. So we feel really good about the clinical profile and RHA 1 as well. With RHA 1 coming at the end of this year with potential approval at that time.

Our next question is from Tim Lugo from William Blair.

Maybe just one housekeeping question before another filler question. For ULS, you mentioned the $620 million global opportunity in 2020. How much of that is in the U.S., not global? And do you know a growth rate for that?

I don't have the -- Tim, it's Dustin. I don't have the breakdown. Majority of it is typically in the United States. I don't have the specific breakdown. In the growth rate, we talked about it growing to about $1 billion in time, but I'll give you that specifics in the follow-up.

Okay. No problem. And just going back kind of broadly to your filler launch, it's obviously a premium product and you're being targeted in your launch. But can you give us an idea of the type of discounting you're seeing? Is this more aggressive because a new premium product is being launched into the market or is this the kind of everyday discounting you're seeing from tertiary market players?

And then are you also seeing spillover into discounting of neurotoxins? I know you obviously don't have DAXI in the market yet, but I'm just wondering how these market dynamics might change once DAXI is approved?

It's a good question. I think from a discounting perspective, the competitive landscape in this environment is pretty entrenched large competitors that kind of have a strategy that they put in place and they kind of put it to play. So you're seeing large amounts of coupons in combination treatments being launched in the fourth quarter, as you typically would see from some of the large players. You're also seeing the same thing around individual new product launches around consumer coupon and really trying to drive that patient into the practice via couponing.

So I haven't seen it change dramatically with the entrant. I think you're seeing kind of an increase in just overall approach and focus on specific products in sort of how you're balancing it with fillers. Will it change with DAXI? Time will tell.

I think the unique thing about DAXI is it's not as price dependent because it provides something to both the consumer and the provider and know their product in the space has. And so we find that whether you're offering something else cheaper, that may not be enough to get that patient or that physician to not use Daxibotulinum. So we feel very good about that once we get in the market. We have not seen any, what I would say, knee-jerk responses in terms of reaction. It's early. And with COVID, I think everybody is trying to figure out exactly where to kind of place their bet.

What's also unique about today is that this market is hard to segment, as you know. You've got thousands of customers all acting as independent type practices. We're seeing even more segmentation and market dependence that you've got some cities that are open and allowing certain things. You've got some practices that have different type of protocols. So it's been hard to kind of trend all of that out in a typical aesthetic market. So I hope that answers your question.

Your next question is from Serge Belanger from Needham & Company.

Just a couple of questions for me. First one for Tobin. Can you just go through some of the push and pulls behind the OpEx guidance for this year? And then secondly, I believe muscle movement disorders make up about 40% to 45% of the overall therapeutics potential neuromodulators, how much does cervical dystonia and ULS cover of that piece of the pie?

And then lastly, I think earlier this month, the FDA scheduled the AdCom to discuss the risk and benefits of dermal fillers. Just wondering if you'll be presenting there? And maybe what are your thoughts on what the FDA wants to accomplish with this AdCom?

Serge, this is Toby. Thanks for the questions. With regards to the push/pulls on OpEx, it appears on the surface that the non-GAAP research and development expenses are flat 2020 to 2021, and that flatness is driven by the inclusion of HintMD. If it wasn't for Hint, the R&D expenses would be lower year-on-year and that's driven by lower clinical activity. If you recollect, we had 7 clinical trials in the year 2020, and now we're running 2 clinical trials in 2021.

Further on, our SG&A expense, which makes up the balance of the OpEx there is up year-to-year, driven by sort of the full year effect of the 100-person field force that we hired.

And then estimates for kind of continued push on both the filler and the toxin there and also a slight full year effect of the HintMD commercial efforts as well. That's sort of the high level of pushes and pulls on OpEx.

So the next question is on the breakdown, I think -- and we have stated here is that the combination of total spasticity was $620 million and going to $1 billion by 2025. For the breakdown, these are kind of hard markets to break down being that the -- orphan diseases and others that are hard to parse out. So what we can -- guess, we can follow back up with those specifics.

And then your last one on the AdCom, we're not planning to participate in that.

There are no more questions at this time, and we'll touch base with H.C. Wainwright and Mizuho offline. I would now like to turn the conference back to you, Mark.

Great. Thank you, operator. In the coming months, we plan to virtually attend the Cowen, Barclays and Needham healthcare conferences. We welcome your request for meetings at these events or directly through us. Feel free to reach out to Jessica, if you'd like to schedule some time.

With that, I would like to thank all of you for participating in today's call.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. Have a wonderful day. You may all disconnect.