Revance Therapeutics Inc (RVNC) 2022 Q1 法說會逐字稿

Welcome to the Revance Therapeutics' First Quarter 2022 Financial Results and Corporate Update Conference Call. (Operator Instructions) As a reminder, this call is being recorded today, Tuesday, May 10, 2022.

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, Mika. Joining us on the call today from Revance are our Chief Executive Officer, Mark Foley; President, Dustin Sjuts; and Chief Financial Officer, Toby Schilke. During this conference call, management will make forward-looking statements, including statements related to the regulatory process and potential approval and timing of approval for DaxibotulinumtoxinA for Injection in glabellar lines and in therapeutic indications, plans related to RHA Redensity and OPUL platform, the benefits to us, practices and patients of our products and services, our financial performance, 2022 guidance, expected cash runway, strategic priorities and capital allocation plans, our market and revenue opportunity and the market demand for our products and services, portfolio growth and our business strategy, planned operations and commercialization plans.

With that, I will turn the call over to Mark Foley, Chief Executive Officer of Revance. Mark?

Thank you, Jessica. Good afternoon, everyone, and thank you for joining our first quarter 2022 financial results conference call. We had a very productive start to the year delivering on several important objectives. First and most importantly, the FDA accepted our BLA resubmission for DaxibotulinumtoxinA for Injection for glabellar lines. With the acceptance, we received a new PDUFA date of September 8, 2022, which reflects a Class II resubmission and will include a reinspection of our manufacturing facility.

This important regulatory milestone was made possible by the completion of our new working cell bank qualification package in Q1. And I would like to thank the technical operations, clinical and regulatory teams for all of their hard work in achieving this objective. Having a PDUFA date is key. This will be the first time since our deferred action in November 2020 that we are working towards a specific date. We will continue to work with the FDA to facilitate their timely review while recognizing that we are now one step closer to a potential approval later this year.

Another priority was to strengthen our balance sheet and extend our cash runway in order to support our strategic priorities of getting our lead asset approved, increasing sales of our RHA Collection and enhancing our customer relationships with OPUL. To that end, we were pleased to achieve this key objective by completing a $300 million non-dilutive debt financing with Athyrium Capital and raising an additional $31.8 million in net proceeds from our ATM offering program. With our recent financing activities and the additional notes that we can issue with the FDA approval of DaxibotulinumtoxinA for Injection, our cash runway can be extended into 2024.

We believe we are well positioned for the significant opportunity ahead at Revance. In aesthetics, we believe our innovative portfolio of products and services will allow us to capitalize on the multibillion-dollar market opportunity that continues to grow at a healthy clip. [Order] our portfolio is our long-acting neuromodulator and we are both ready and excited to bring our drug product to market. Our commercial infrastructure is strong, anchored by our proven 100-plus-person sales team, our over 3,500 aesthetic accounts, which continue to grow, and our industry-leading training and experience center at our Nashville corporate headquarters. Together with our differentiated commercial strategy and complementary portfolio offering, we believe DaxibotulinumtoxinA for Injection has a solid foundation for commercial success.

Additionally, in advance of the anticipated approval of our neuromodulator, we've entered into partnerships with 2 experienced fill/finish contract manufacturing organizations to help support our production needs. This is in addition to the drug substance and drug product we will be manufacturing at our Northern California facility.

Turning to therapeutics. We continue to be excited about the opportunity for our long-acting neuromodulator. Currently, we are ready to file a supplemental BLA for DaxibotulinumtoxinA for Injection for the treatment of cervical dystonia following the FDA approval of our indication for glabellar lines. We successfully completed our ASPEN Phase III clinical program in November of last year and have been actively preparing our supplemental filing. Given the encouraging data from our clinical programs, which showed that our drug product was generally safe, effective and had a long duration profile, we look forward to our potential opportunity in therapeutics as well. Indication for cervical dystonia will be our entry point into the $1.2 billion global muscle movement disorder category, which has a compound annual growth rate in the high single digits.

In summary, we have several important near-term catalysts across our business and execution will continue to be key. We remain bullish on the long-term market opportunity for Revance and in particular, on our ability to lead the long-acting neuromodulator segment. I would like to thank all members of the organization for their continued dedication and support in advancing our corporate objectives and priorities.

With that, let me turn the call over to Dustin, who will cover our performance in the first quarter. Dustin?

Thank you, Mark. I'd like to start by highlighting again the significant regulatory milestone we've achieved with the FDA's acceptance of a resubmission. With the September 8 PDUFA date, we are looking forward to potential approval and launch of our neuromodulator in the not-too-distant future. The cornerstone of the Revance aesthetics strategy is to foster long-term partnerships with exclusive providers and provide product innovation that delivers the best consumer outcomes. We believe that DaxibotulinumtoxinA for Injection, once approved, will anchor that strategy, build on our track record with RHA and OPUL and position us for accelerated growth in the years ahead.

Now turning to our performance. Growth continued across our aesthetics portfolio in the first quarter with our RHA Collection reaching an all-time sales of over $100 million just after completing its first year of commercial launch. RHA sales for the quarter totaled $20.8 million, up 78.9% year-over-year, driven by solid account growth and increased productivity within our accounts. Despite the first quarter being the slowest period of the year for aesthetic procedures, we continue to drive consumer awareness and adoption to our targeted sales efforts in live and virtual training sessions at our Nashville headquarters.

Across our products and services portfolio, total accounts grew to over 3,500 at the end of the first quarter. We have a number of training and education experiences planned over the coming months to continually drive product adoption and expertise, especially as we prepare the launch of RH Redensity in Q3 of this year. We are excited to bring to market the first and only FDA-approved filler for both superficial dermal and dermal injection of dynamic perioral rhytids rides or lip lines. Redensity has the most stretch of the RHA Collection and has a low rate of modification to deliver a natural look that is consistent with the rest of the collection. Given its unique formulation properties, injectors can fine-tune the treatment of lip lines. We believe the product will be a great addition to the RHA Collection, providing injectors with more treatment options to optimize outcomes.

Turning to our fintech platform. Gross payment volume totaled $154 million in the first quarter, up 66.4% from the same period last year, driven by account growth and higher transaction volumes processed. On a trailing 12-month basis, GPV was approximately $570 million. The team continues to work hard to enhance OPUL's platform experience. We are currently working on building practice loyalty capabilities with memberships and improving insights with transaction data. All the new features under development are designed to help practicers grow their business and, in turn, allow us to deepen our relationships with our practice providers. In short, we are excited about the future of the OPUL platform and its ability to unlock additional value for Revance.

With that, I'll turn the call over to Toby to cover our first quarter financials.

Thank you, Dustin. Before I discuss the results for the quarter, I'd like to review our recent financing activities and our balance sheet. As Mark mentioned, enhancing our financial flexibility ahead of the potential approval of our neuromodulator was a key objective for 2022, and we were pleased to achieve this goal despite being in a challenging financial market.

In March, we closed a $300 million note purchase agreement with Athyrium Capital as part of our long-term financing strategy to support our operating plan. The agreement will not only serve as an important bridge to the FDA approval and commercialization of our neuromodulator, but also support the growth of the rest of our aesthetics portfolio. I will go into all the details on the call, but we'll provide brief highlights of the transaction.

Tranche 1 of $100 million was issued at closing, providing us with immediate liquidity. Tranche 2 of another $100 million will be available at our option subject to the FDA approval of our neuromodulator within 18 months of closing. And Tranche 3, an uncommitted $100 million available at our option within 24 months of closing and tied to revenue targets for our neuromodulator. Further details of the transaction are available in the note purchase agreement that was filed with our Form 10-Q earlier today.

With the $100 million in notes issued and an additional committed $100 million available subject to the FDA approval of DaxibotulinumtoxinA for Injection for glabellar lines, our cash runway can be extended into 2022 -- into 2024. In addition to our debt financing, we raised $31.8 million in net proceeds year-to-date from our ATM program, $8.9 million of which was raised during the first quarter. With the total shares of common stock issued, we have effectively completed our $125 million ATM offering that was initiated in 2020. Total cash, cash equivalents and short-term investments at quarter end was $262.6 million. For the time being, our cash preservation measures that are gated to the FDA approval of DaxibotulinumtoxinA for Injection, remain unchanged and disciplined capital allocation will continue to be a priority.

Turning to the results for the first quarter. Total revenue was $25.3 million, representing an increase of 89.9% from $13.3 million in the same period in 2021. Revenue growth was primarily due to increased sales of the RHA collection of dermal fillers. Revenue for the first quarter included $20.8 million of product revenue from the RHA Collection, $3.6 million of collaboration revenue from our partnership with Viatris and $0.9 million of service revenue from our fintech platform.

Operating expenses for the first quarter were $87.5 million compared to $83.3 million for the same period last year. Excluding depreciation and amortization and stock-based compensation, non-GAAP operating expenses were $59.9 million for the first quarter, representing a 7% decline over the same period last year due to lower SG&A expenses as a result of our cash preservation measures, partially offset by higher R&D costs related to pre-commercial manufacturing and quality activities related to our neuromodulator and product development for OPUL.

As a reminder, we project R&D expenses in 2022 to be primarily driven by manufacturing costs for DaxibotulinumtoxinA for Injection, which according to GAAP accounting standards are expensed as a period cost until the drug product is approved. As for our operating expense outlook, we are confirming our previously announced GAAP and non-GAAP operating expense guidance for 2022. Finally, Revance's shares of common stock outstanding as of April 29, 2022, were approximately 72.8 million with 80.4 million fully diluted shares, excluding the impact of convertible debt.

And with that, I'll turn the call back over to Mark.

Thank you, Toby. In closing, we are pleased with the meaningful progress we have made from a regulatory, financial and operational perspective, all positioning us for growth and opportunity ahead. We remain focused on delivering on our strategic priorities for 2022 with the top priority being obtaining FDA approval for our highly anticipated DaxibotulinumtoxinA for Injection for glabellar lines. Also, I'd like to thank all of our stakeholders for their continued support of Revance.

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

(Operator Instructions) Your first question comes from the line of Ken Cacciatore from Cowen & Co.

Team congratulations on all the progress. Just a couple of questions. The first is just wanted to see if the reinspection is actually (inaudible). And then second, I know, Mark, in the past, you talked about a little bit of a paced launch of DAXI assuming approval. Can you just talk about what that entails as you think about kind of what accounts you should -- you will go to level of training and then maybe discuss with us, in absence of sales early, kind of what metrics we should be focused on? And then lastly, on approval, I know you have a 100-person sales team now. Can you just give us a sense of where that is going?

Sure, Ken. First off, could you highlight -- I missed the first question a little bit, something about reinspection?

Yes. Just wondering if it's been scheduled yet actually formally scheduled yet?

Got you. Perfect. Okay. So let me hit this in order. So first one on the reinspection. Consistent with our company policy, we're not going to be commenting on the status of the ongoing BLA review process or interactions with the FDA. We did sort of break from that given the COVID environment and some of the FOIA requests that were made public, so we felt like we needed to comment on that. So really, the next time that you'll hear from us will be around the PDUFA action date or should we hear something sooner. Of course, if we hear anything material between now and then, we would also put that out. But we're going to stick with kind of prior company policy, and we'll continue to be as responsive to the FDA as possible to support our planed approval.

In terms of the pacing of the launch of DAXI and the metrics, if you think about it, we've long talked about DAXI, because of its performance profile, has a unique opportunity in the market, but it is going to be different. And so it's going to be really critical that we use this initial launch phase to make sure that we get it in the hands of a targeted group of practicers to let them use it in a real-world setting. So historically, we've talked about this phased launch where the early phase is going to be in the hands of the small group, and then we'll expand that to a little broader group based on the learnings that we have. So we think this is the right way to build the brand over long term.

And this is different than other competitor products where there's no difference in terms of sort of the reconstitution or the performance of the product. And so we think this is the right way to launch the product. And it's very consistent with what we did with RHA line of fillers too. We started with a very phased launch, all geared towards ensuring the right long-term outcomes. And then once we get sort of that foundation built, then we can start to accelerate it. The good news is, is we now have over 3,500 accounts where we've got relationships between both our products and services. So we'll have no shortage of accounts that we can leverage once we get through this initial phase.

On the metric side of it, I think in the early phase, we'll talk about sort of some of the learnings from the early rollout and then we'll certainly signal once we feel that we're ready to start more of the ramp kind of when that is. In terms of the sales force, you are right, we've got roughly 100-person sales organization. Given that we're going to start in more of a staged approach with this launch, we will certainly look to expand the sales force once we feel like we're ready to accelerate into that next phase of broad commercial adoption, but we will also want to make sure that we pace that with what's the right time in terms of account -- changing up some of the territories and expanding so that we do that in a very thoughtful way.

Your next question comes from the line of Seamus Fernandez from Guggenheim.

Congrats on the quarter. Just wanted to get maybe a little bit more color as you think about the timing of launch. So if we were to actually see full approval on the PDUFA on September 8. Can you just kind of walk us through what needs to happen from that point in time to then execute the launch officially? And I know it's going to be measured, but maybe you can just walk us through training of a sales force that would need to happen incrementally. And then just when you would anticipate actually launching? And I think in the past, Mark, you had talked about maybe the initial rollout being to a concentrated group of physicians, maybe something in the hundreds and then expanding sequentially and more broadly as physicians got experience. I think that's consistent with what you just talked about, but I didn't know if those numbers were a reasonable expectation.

And then just last thing on the fillers. Can you just walk us through a little bit really good performance in what's a seasonally -- typically kind of seasonally weak quarter or a weaker quarter in first quarter. Second quarter, very strong. Just wondering how the trends are looking at this point as we're halfway through the quarter?

Sure. Well, I'll answer the beginning of your first question and then turn it over to Dustin on some of the sales and then hit your second question after that. So in terms of the rollout post approval, so like you said, if we receive approval on September 8 as a theoretical, then there's going to be a little bit of time after we receive that approval to get sort of the final packaging and the labeling and everything squared away and put on the boxes so that we can ship it. So you got a few weeks there that you have to account for on the logistics side of it. After that, we talked about going to a very small, concentrated group of physicians to again, get it in their hands and have them provide us feedback on a real-world setting. And then following that phase, we would then move to this broader group that you talked about. And then with RHA, we said that was roughly 100 or so customers will rightsize to what we think that group is for this next phase to take that learnings from that initial group, use it in a broader setting and then take that learning and experience to refine sort of the training and education process that will be needed to roll it out.

And again, we've made a pretty sizable investment in Nashville with our corporate training and education center to be able to make sure that we're providing world-class training. And given sort of the performance profile of the product, we think that we'll get high levels of engagement from physicians and injectors to want to make sure that they learn all the tips and tricks that will be important to getting a successful outcome. And Dustin, maybe you can talk a little bit about sales force and any other logistics associated with it.

Yes. Thanks, Mark. Obviously, the good and bad is we've had a little extra time here. So we are very well prepared from a sales force training perspective. We were able to train on a lot of the clinical data already as well as the toxin market landscape, right? But those are data that we can train on now. So they have been brought up to speed with that while constantly kind of getting up to speed with all the new clinical programs and things that are ongoing. And so we feel like we've got a jump start from a sales force training perspective. We will bring them together to train them on, then the marketing messaging, the labeling, those sorts of things specific to DAXI, but we believe that we can do that in tandem with some of these launch phases that Mark said. And I think we'll also be able to leverage the Nashville experience to potentially expand a bit of the early numbers in those groups. We've made that investment and allow us to be very efficient with our training and accommodate significantly more numbers than we're able to do with the RHA preview. So it will be focused on, obviously, launching the product with the right account as with what's the right outcomes. But we feel like we'll be in a really good position to get started early. Mark, do we hit the RHA trends?

Yes. And so Seamus, to your question on just sort of what we're seeing out there in the market in trends. Yes, I mean, as you've noted, Q1 is seasonally a down quarter, certainly relative to Q4, and we were encouraged based on the performance of our RHA sales in Q1 that the degradation of Q4 to Q1 was less than what is typically the industry standard. And I think that reflects the fact that we're still in launch and growth mode. So we continue to be encouraged by what we're seeing. And here we are a little over a year in the launch generating almost $100 million from the launch, launching 3 SKUs. So we're really proud of what the commercial team has accomplished out there. We continue to be encouraged by the trends that we're seeing in the market. And so in Q2, we're continuing to see a good market out there, good demand for injectables. I know there's a little bit of question around sort of rising interest rates and COVID resurgence. But thus far, we continue to feel like the market is steady as she goes, and we're continuing to see good growth there. So we continue to be cautiously optimistic as we move through the year in terms of how we think the injectable market is going to perform.

Your next question comes from the line of David Amsellem from Piper Sandler.

So I just have a couple. So first on Redensity, can you just talk about how you're sizing up that opportunity and specifically the extent of which that expands the overall peak sales potential of the RHA franchise. So that's number one. And then number two, just a high-level question about the toxin market. We've seen some pretty strong growth out of the market leaders and even strong growth with some smaller players here. So I guess the question here is, do you see a lot of that growth coming from prestige accounts, the kind of accounts that you're going to be targeting initially? Is that coming from just an expansion of just the number of injectors? And as you look at that, how does that inform how you're thinking about early commercialization and your efforts surrounding DAXI?

Great. Thanks, David. I'll go ahead and have Dustin answer your first question about Redensity, how we size the market and how we think about what it might do from an expansion opportunity, so Dustin you want to hit that one?

Yes. Thanks, David. We're really excited about the launch of RHA Redensity. It will be our fourth gel in the marketplace since launch, and we'll be the first company that has 4 unique gel properties in the market that early from introduction in the United States, which allows us to really address the ever kind of changing needs of the practitioners in the United States. From a market perspective, it's really difficult in the dermal filler market to kind of tease them out indication by indication because so much of the use is outside of the kind of FDA-labeled indications. We feel like the RHA Redensity line is unique and that it is able to be the first and only product that's injected superficially and mid-dermally which allows for that icing on the cake effect across a variety of locations. And so it's a great fit. It allows us to continue to be innovative in the space, have something new to talk about and train on and also continue to address the evolving needs. And so we feel really good about it being that product that helps us continue that relevancy and shows the strength of the entire range of the product.

Yes. And then on your second question, David, regarding the toxin market and the strength there and where is the growth coming from? I mean we're seeing the same trends, right? I think that if you look at sort of the forecast over time, I think collectively as an industry, we continue to think we're going to see good growth in the facial injectable category. And I think it's going to be a combination of all the factors that continue to drive it today. You've got some younger people that are engaging in sort of prejuvenation. You've got people that are deciding to finally engage in aesthetics because they want to retain the best version of themselves. And I think that's a function of a good healthy market. And with more competition and more awareness, I think you're going to see more people come in. And we would expect also with our long-acting neuromodulator that it's going to stimulate another narrative out in the market around sort of the benefits of toxins overall. So I don't know that there's any sort of unique catalyst right now. I think it's the collective effect of the industry further investing dollars and bringing more people into the fold.

Some of the growth is impacted by price increases that some of the competitor companies have taken. So I think you're seeing not only good increase in overall procedures, but some lift due to price as well. I don't think any of this changes our strategy. When we've done our market survey work, we continue to believe that the value proposition of a long-acting neuromodulator really resonates with people that are seeking a toxin treatment. And so we think that we'll continue to benefit from the overall growth and that a healthy subset of that group, we believe, is going to be interested in the value proposition of a long-acting neuromodulator. But we feel that the strategy that we've had in place for some time continues to be the right strategy. And even with the market growth, we don't see any need to change that.

Your next question comes from the line of Annabel Samimy from Stifel.

I was wondering, as far as the training is concerned, is there anything you can share with us on the product profile that you understand to be different that physicians really need to be trained on outside of duration? You already mentioned that there's some reconstitution that's required. So I know training for new neuromodulators have tripped up others in the past. And so how do you feel about the profile here and how easy it is to train patient physicians on this one? So that's, I guess, question number one, what kind of barriers do you have there for adoption?

And then just to reconfirm, I'm not sure if you're going to even answer this. But can you tell us where the FDA -- the current review by the FDA is strictly based on the manufacturing changes that you made and everything else has been negotiated, i.e., label that this is strictly a manufacturing thing? And then I guess those are my 2 questions the others have been answered.

Yes. So first on the training side of it, I mean, I think we've got the benefit of having seen other companies launch into the marketplace with sort of different dilution or reconstitution and a variety. So we're acutely aware of the importance of making sure. I think one of the big advantages that we have is the unique performance profile. So in any time you're asking somebody to change behavior or learn something new, the question is, is it worth their time to invest in doing something different. And we believe that based on the duration profile of our neuromodulator that the answer is yes. So we are very aware of the fact that everybody has their own dosing, right? So our dosing is different than others.

And so we need to make sure that our injectors understand exactly how to reconstitute what that sort of injection pattern was for the clinical trials. And then that brings us back to sort of this strategy of working with a small group of sort of leaders in the field to get some real-world feedback and then use those learnings again to share that with that next group that we go into. And so we think we are being very thoughtful and we will be very methodical. And as we talked earlier, that's why for us out of the gate, it's not so much how much revenue we generate initially. It's how do we ensure that we get really good clinical outcomes because with good clinical outcomes, we believe that we've got a great opportunity to be a meaningful player in this market.

And frankly, it's not too different than the launch of the RHA fillers. As good as the RHA filler line is. If you look at how physicians are injecting that, there have been some tweaks that these injectors have made, they sometimes tend not to go quite as deep and bury it on the bone and do some things there. And so we've had to be really thoughtful while remaining on label to make sure that people understand the subtle differences. And I think that's showing up in the performance of the numbers. And so based on those learnings, we think we've got the right strategy in place, and we've also believed that we've set it up to make sure that we are learning out of the gate versus trying to chase a number.

On the second one, in terms of the FDA, in terms of the review, I mean, if you look at the CRL that we received the observations were limited to sort of manufacturing. They were the 5 observations. We had a Type A meeting. We indicated that what the agency wanted us to do was to provide the qualification for the new working cell bank. And we also previously stated that heading into the deferral where we're waiting for the inspection, everything else had already been addressed by the agency. So clinical, nonclinical, CMC, label. And so we continue to feel very good about where we are and are looking forward to working closely with the agency towards our PDUFA date.

Okay. If I could just ask one more follow-up on the training question. Is there -- I guess, I know it's hard to put a timeline on it, but for the training, like at what point -- is it just initial feedback that you're getting in terms of the initial performance or is this going to take longer because you have to sort of watch the duration and see how the product performs over the course of the 6 months, get some feedback from physicians on how satisfied the patients were like? I just wanted to kind of understand the time frame that we should think about this training period, let's say.

Yes. No, in talking with our physicians, I think that given sort of the amount of clinical data that's been generated, demonstrating the duration profile of the product, I think what they're very interested in is sort of that acute look, right? So you inject the patient, you wait a couple of days, you wait to see, did you get sort of that look that you're going for. So we actually think that they can do a series of patients in turns where they inject. They wait to see whether or not they're getting sort of that acute result that they're looking for and whether or not they need to make any other tweaks to sort of get what the outcome is. I think that today, we're going to get the benefit of the doubt on the duration. And so it's really about that acute performance. I don't know, Dustin, if you wanted to add anything?

No. I think the other thing, Annabel, it's how they integrate the practices. You've seen a lot of these product launches fail because they don't know how to charge for it. They don't know how to explain it. This is something that we're going to invest in early on to make sure that when they get the product, they know exactly what the value is, how to charge patients for it, how to schedule them and then how to get the most satisfaction out of a 2 times a year neuromodulator. So we feel like it's not only just about the clinical and outcomes profile, but also about how to best integrate. And if you look at our model, we don't want to call on everyone. You've seen launches where they sample thousands and thousands of accounts and the metric is to then determine how many of those then convert into successful practices. We want to kind of go the other way, which is take the practices that believe in the value that we're driving to round them with RHA, OPUL and DAXI and go deeper in those accounts. We feel like that's the strategy that wins and focusing directly on how to make them successful as our partners versus dropping off a product and trying to expand it as quickly as possible. We think you can drive more value with than the latter.

Your next question comes from the line of Balaji Prasad from Barclays.

Two from me. Firstly, on the competitive landscape. I would like to get your thoughts around Evolus extra strength duo. How do you think this would impact the market dynamics, assuming that it comes in a couple of quarters after DAXI has been present? And how can you prevent any loss of market share, if at all, with a second toxin, maybe with similar claim to fame around durations? Second question is on biosimilar BOTOX and the delay that Viatris called out yesterday. Is there any reason to consider that this project could be shelved or delayed considering your partners altered importance of biosimilars in that?

Thanks, Balaji. Yes. Why don't I take the first -- I'll take the second one first and then hand it back to Dustin on the competitive landscape and stuff. But on the Viatris side of it, the delay there, we use the same drug substance manufacturing for both the biosimilar to BOTOX in our program. And so there's been a direct impact based on the delay of our approval for DaxibotulinumtoxinA for Injection, which has impacted that program. But we continue to feel very encouraged. The teams continue to collaborate really well. Move forward. We like what we're hearing from the agency about what the path forward looks like. And so that's really been the biggest impact. And so hopefully with approval that, that will put us on a much more deterministic timeframe, but that's related to the Viatris side of it. And then if you want to talk about competitive landscape.

Yes. Thanks, Mark. So Balaji, I believe you're talking about the Evolus high-dose toxin clinical program that they put together.

Yes.

Yes. So if you look at this, this landscape is not new. The doses that were picked for the neuromodulators that have been in the market for decades, were picked specifically because they drove the right efficacy and the right safety profile. If you look at therapeutics being started, there would be a kind of a lean toward -- if a higher dose product was more efficacious, you'd actually be better off in aesthetics having that because of the kind of combination of the therapeutic pricing. And so we feel that the high-dose noise will be out there consistently. But the fundamental fact is that DAXI is the first ever product to be formulated with a cell-penetrating peptide that stabilizes the product and delivers an efficacy profile with the same active amount of neuromodulators that is currently on the market today. And so we find it a lot to be noise. We think DAXI has proven throughout a large clinical profile of programs, both in aesthetics, across multiple indications in aesthetics and in therapeutics that this is a product that acts differently. So it's not a dosing paradigm. And so we think there'll be noise out there. But if a larger-dose product was more effective, we think that, that would have had kind of impact in the market already because they could have done that with a BOTOX or [Xeomin] all these other products that have chased those kind of double dose or higher-dose studies as well. So we feel really good about the uniqueness of DAXI and look forward to getting into market.

The next question comes from the line of Vamil Divan from Mizuho Securities.

I think most of might have also been asked, but just to clarify, I know you can't say too much around the regulatory side of things. But you mentioned you sort of -- you're not going to be giving this sort of play by play like you did before, but you will sort of be commenting on any material updates. So I just want to make sure we're clear because we get a lot of questions on this issue. So as you go through this process, would you be announcing sort of when they're coming from an inspection like you did last time with the announcement it's completed? Or would you announce if there's any sort of findings from the inspection? Just trying to get a sense of what you're -- at this point, what you consider a threshold for giving any update?

Yes. No, Vamil, I appreciate that, and we certainly can appreciate sort of the desire from the investor community to kind of get whatever information that we're comfortable providing. Yes. We're going to kind of fall back to normal company policy where we don't think it's appropriate to comment on ongoing FDA engagement. So things like, hey, has the inspection taken place or not, we wouldn't look at that as sort of routine or typical. Given that we now have a date that we're working to, a PDUFA date, our next expected communication would be once we receive official notification from the agency regarding our CRL resubmission on or before the September 8 or if we were to receive something else material, scheduling of an inspection, we would not deem to be material. We've already indicated that it's a Class 2 inspection and that we expect an inspection of our facility. And so we would not expect to give any additional updates between now and either a decision from the agency or our PDUFA date whatever happens first or in the event that we will receive something that we deem to be material.

Okay. All right. Great. And then maybe just one quick follow-up, probably just to what you said earlier on some of the macro concerns and inflation-wise and consumer spending. I know you're still a few months away from a potential launch. But I'm just curious how that might impact how you're thinking about pricing in this market we've seen competitors raise price. Do you still see this as something where you'd come in -- are you thinking of this on a premium sort of basis above where the current other toxins are priced? Or any sort of additional color on the pricing side, just would be helpful as we think about how you're thinking about it a few months out.

Sure. We've been very thoughtful around sort of pricing. We've done a lot of market research. We've spoken with a lot of physicians, too. Again, given the investment that we've made in innovation, we believe that based on the duration profile of the product and how differentiated and unique it is, that it will command and warrant a premium in the marketplace. And so I don't see us making any short-term decisions based on interest rate hikes or whatever, and the injectable category has proven to be fairly resilient. So we believe that there's room for us to charge a premium given the duration profile and that there's also an opportunity for practices to charge consumers more and offer frankly more value to them. And frankly, if anything, in a market where interest rates rise and other things, we think there will be not an insignificant number of consumers that are going to be looking to make sure that they get good value for the dollars that they spend. So we are obviously not giving the details of our pricing strategy until launch for competitive reasons, but we think that we've got that right balance of charging a premium, practices making more margin and consumers getting more value and that, that will fit in today's market.

Your next question comes from the line of Douglas Tsao from H.C. Wainwright.

I might have missed something earlier, but just in terms of the comments around some of the training needed, I'm just curious how long -- because it doesn't sound like for each individual physician is going to necessarily take that long. But how long do you think you'll be able to roll this out to sort of that initial group of customers, especially given the fact that there are a fair number of accounts that have had experience with the product during -- in the clinical trial.

Fair enough. Great question, Doug. And I think that while there is certainly no -- there's 60 or so sites that were part of the clinical trial, remember that they had to do all the injections per the prescribed protocol and it was only for glabellar lines. We did some Phase II work in upper facial lines but that was sort of a small group of only a handful of 4 or so. So even those that have experience with the product, they're going to want to use it as they currently use other products, which is going to be more broad. And so given sort of that desire to use the product, get that feedback of how -- what's that sort of settled look after a couple of days, I think that they're probably going to want to cycle through that a little bit. And that's why we're going to take this in stepwise function where it will be that initial small group. We'll take some of those learnings and then roll it out into sort of a little bit bigger preview group all with the focus on making sure that we get the right outcome. So -- and we'll continue to update you as we move forward. But again, we think this is really the right strategy in this initial phase to make sure that we focus on outcomes don't compromise that. And then like I said, we've got a growing base of customers as we move forward that we'll be able to lean into.

And what will that initial group of customers be and presumably, those tests can be significant overlap with the RHA customers right now?

That's correct. Yes. If you look at our strategy, where we said we're targeting sort of the higher-end customers that are focused on outcomes and less on sort of pricing. So that targeting is the same targeting that we've used for the RHA fillers. And so it will definitely be a majority of overlap between our RHA customers as we go into it. In terms of the timing of that, we said that it will be this initial phase of, call it, a quarter or so with this initial group and then we'll move into that preview group, which we will kind of get a better feeling as to the learnings from that first group, how long that second phase will be. And I think that's the kind of information that we'll be able to share as you think about your models once we get that feedback.

Okay. And so that would be sort of the initial phase and the preview phase. And then after that, we would move -- you would move into sort of a broader launch?

That is correct.

Your next question comes from the line of Jim Little (sic) [Tim Lugo] from William Blair.

This is John on for Tim. Just 2 from us. So first, just wondering about how your latest views on how the growth profile for the RHA line will change next year, assuming that DAXI enters the market around year-end as you build out that franchise. And second, for the supplemental BLA. Just wondering if you can give us any more color on the timelines for filing assuming DAXI is approved? Is that going to be something that's in the order of weeks or months or maybe something a little longer?

Why don't I take the second one first, John, and then I'll let Dustin hit the first one. So the supplemental filing for cervical dystonia, we've already completed the entire clinical program. We pulled together the information that was needed to complete that submission post the approval of DaxibotulinumtoxinA for Injection for glabellar lines. So I would expect that the submission of that supplemental BLA will occur within a quarter post launch. And then as you know, we completed a Phase II program in upper limb spasticity. We paused additional clinical programs in therapeutics during this phase given the CRL to preserve our cash runway. And so once we file the CD, we get into market, and then we'll kind of revisit sort of what's the next step that we want to take on the therapeutics program. And then Dustin, I'll hand over the first one to you.

Yes. We remain really excited about the kind of long-term trajectory of the RHA Collection, right? In talking now, we'll have 4 unique gels with 2 different indications and also further indications coming in the future. And so that, coupled with, yes, the sales force will have a different priority in terms of adding DAXI in the bag, but we're also looking at what's the right time to expand reps? And then how do you look at this bundling opportunity between RHA and DAXI, how does RHA unlock potential for DAXI, how does DAXI unlock potential for RHA. So we feel really good about the trajectory. You've got a healthy growing dermal filler market in the United States. We've long talked about TEOXANE having a 10% share kind of in the markets in which they compete ex U.S., where they compete directly and us having DAXI will continuing allow us to kind of execute against that and potentially higher. So we feel really good about the trajectory of all those products and really then adding OPUL to ensure the stickiness across the entire portfolio. So we should be hitting on all cylinders with the launch of DAXI in combination of our training efforts and then kind of wrapping together the full portfolio.

Your next question comes from the line of Rohit Bhasin from Needham.

This is Rohit on for Serge. Can you talk a bit about how the rollout of the OPUL platform is going? And do you plan to phase out HintMD over time? And out of the 3,500 accounts, how many users are using the OPUL and how many HintMD platform?

Yes, Rohit, this is Mark. So on the launch, if I kind of step back and look at what were the goals for this year. So we talked about becoming a payment facilitator as being an important step to have access to the source data to help provide the practice insights. So we've evolved the system now to OPUL to where we have the payment facilitator function. We've also turned on the catalog as well so that when checkouts are performed, these practices can flag the services that were provided, again, that we have sourced level data. So this year is about rolling out OPUL with that functionality, PayFac and catalog. And so we're off to a good start in Q1. We reported on our gross processing volume. So we've seen, again, good growth in accounts that have it and the overall processing volume, and that will be a metric that we continue to report out on as an indicator of the health of the business.

We've also talked about migrating the HintMD over to the OPUL platform, and so we're well underway, and we're just trying to make sure that we rightsize that, the HintMD platform has been very successful for those accounts that have adopted it. And so we just want to make sure that as we shift people from HintMD over to OPUL, that we don't break anything along the way or lose momentum in those accounts. But our expectation is that we will migrate most, if not all, of the HintMD accounts over to OPUL this year. And so we like that trajectory. We talked also about turning on practice insights, getting the catalog up and running and then continuing to drive further value in this platform. We've not broken out the specific number of accounts that have the OPUL platform within the 3,500 accounts nor have we broken out the RHA accounts separately. We've just said that between the 2, we're in over 3,500 accounts, and we've been very sort of consistent and measured in the onboarding of new accounts on a quarterly basis.

Okay. There are no further questions at this time. I will turn the call back over to Mark for any final comments.

Thank you, everyone, for joining today's call. We have the upcoming William Blair Healthcare Conference. We look forward to seeing those of you there at that conference who're going to be in attendance. And we welcome your request for meetings directly through us as well. So 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.

This concludes today's conference call. Thank you for participating. You may now disconnect.