What changed in this filing

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Item 1. Business

2023-03-08 compared with 2022-03-03 · 71 added, 59 removed, 228 unchanged (36% of the section changed)

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Food and Drug Administration, or FDA.

In May 2019, we commercially launched Jeuveau ® in the United States, and our net product revenue totaled $99.0 million for fiscal year 2021 and $34.7 million for the fourth quarter of 2021.

In May 2019, we commercially launched Jeuveau ® in the United States.

In November 2021, we announced the initiation of a Phase II clinical trial designed to investigate a higher strength dose of Jeuveau ® in the glabellar lines.

We plan to enroll our first patient in the clinical trial during the first quarter of 2022.

We completed our patient enrollment in the clinical study evaluating the “extra-strength” dose in the second quarter of 2022 and the trial is expected to be completed in the first half of 2023.

If this indication is approved by the FDA after our completion of all necessary clinical trials and regulatory submissions (including a Phase III clinical trial), we will have the opportunity to offer an extra-strength dosage option, which may make Jeuveau ® the first multi-strength neurotoxin and give customers and consumers increased treatment options.

International

In August 2018, we received approval from Health Canada for the temporary improvement in the appearance of moderate to severe glabellar lines in adult patients under 65 years of age.

We began marketing Jeuveau ® in Canada in October 2019 through our distribution partner, Clarion Medical Technologies, Inc., or Clarion, and our net service revenue totaled $0.7 million for fiscal year 2021.

We began marketing Jeuveau ® in Canada in October 2019 through our distribution partner, Clarion Medical Technologies, Inc., or Clarion.

In September 2019, we received approval from the European Commission, to market Jeuveau ® in all 27 European Union, or EU, member states plus the United Kingdom, Iceland, Norway and Liechtenstein.

In January 2021, we received a positive decision from the European Commission to add the 50 unit product to the existing approval obtained in September 2019.

We plan to launch Jeuveau ® in Europe in select countries during the third quarter of 2022.

We received acceptance of our submission to the Australian Therapeutics Good Administration, or TGA, for regulatory approval of our neurotoxin in Australia in the first quarter of 2022.

We expect to receive full TGA regulatory approval and launch the product in Australia in 2023.

We commercially launched Jeuveau ® in Great Britain in September 2022, in Germany and Austria in February 2023, and we are finalizing plans for entering additional countries in Europe as part of a phased rollout.

In January 2023, we received approval from the Australian Therapeutics Good Administration, or TGA, for regulatory approval of our neurotoxin in Australia.

Our primary market is self-pay aesthetic healthcare, which includes medical products purchased by physicians that are then sold to consumers or used in procedures for aesthetic indications that are not reimbursed by any third-party payor, such as Medicaid, Medicare or commercial insurance.

By focusing on the self-pay medical aesthetics market, we believe we are not exposed to reimbursement risk associated with a reliance on payments from such third-party payors, and we are subject to fewer regulations that place limits on the types of marketing and other interactions we have with physicians.

According to Medical Insight’s The Global Aesthetic Market Study, within the self-pay aesthetic market, the global aesthetic neurotoxin market is estimated to grow to approximately $5.5 billion in 2025.

aesthetic neurotoxin market is expected to grow to approximately $3.7 billion in 2026.

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We believe pursuing an aesthetic-only non-reimbursed product strategy creates meaningful strategic advantages in the United States, including pricing and marketing flexibility.

We utilize this flexibility to drive market adoption through programs such as promotional events, experience product programs and pricing strategies.

We utilize this flexibility to drive market adoption through programs such as promotional events, co-branded marketing programs and pricing strategies.

• We offer a unique technology platform.

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We not only leverage technology for operational efficiency, but more importantly, to enhance a customer’s experience.

The combination of a highly specialized sales force and our technology platform is an effective and competitive model.

We believe the combination of a highly specialized sales force and our technology platform is an effective and competitive model.

• Results from our TRANSPARENCY global clinical program in more than 2,100 patients provides robust data to physicians evaluating the purchase of Jeuveau ® .

We believe the comprehensive TRANSPARENCY clinical data set, including a head-to-head Phase III study comparing Jeuveau ® and BOTOX, provides physicians with confidence in recommending Jeuveau ® to their patients.

• We have strong relationships with aesthetic key opinion leaders, or KOLs.

We have established relationships with aesthetic KOLs as a result of our management team’s industry experience and engagement of our clinical trial investigators.

KOLs are important information resources to the general physician-customer market due to their clinical expertise, academic reputations, active clinical practices and their status as medical innovators.

The broader physician community often looks to KOLs for their experience with products and procedures as part of their new product and procedure adoption process.

• Our management team has significant experience and expertise in medical aesthetics .

Our management team has extensive experience in self-pay healthcare markets, in the development, market launch and commercialization of

major medical products, execution and integration of business development transactions, identification of and partnerships with KOLs, and understanding of the regulatory environment of the healthcare markets.

Our management team has extensive experience in self-pay healthcare markets, in the development, market launch and commercialization of major medical products, execution and integration of business development transactions and understanding of the regulatory environment of the healthcare markets.

Key members of our leadership team have also served in relevant senior leadership positions with leading aesthetic companies.

We launched Jeuveau ® in the United States with our own specialty sales organization now consisting of over 100 positions between representatives, management and other sales employees and in Canada through our distribution partner, Clarion.

We plan to launch in select European countries during the third quarter of 2022.

We launched in Great Britain in September 2022, in Germany and Austria in February 2023 and plan to launch in additional European countries and Australia.

We plan to expand our product offerings over time through in-licensing, partnerships and acquisitions and by launching our products internationally.

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• Pursue an aesthetic-only strategy to enhance marketing and pricing flexibility along with improving transparency for our customers.

• Leverage our strong KOL relationships to assist in scientific presentations, publications, and other methods to drive success of our commercial launch of Jeuveau ® .

• Launch directly or partner outside of the United States to reach and serve physicians and consumers in those territories.

• Leverage our differentiated digital platform to efficiently open new accounts, personalize the purchasing process and efficiently deploy marketing programs at scale.

• Leverage our differentiated digital platform to efficiently open new accounts, personalize the purchasing process and efficiently deploy marketing programs at scale, including co-branded media.

• Establish a leading medical aesthetics company with a diversified product offering by in-licensing technology, developing partnerships and potentially acquiring products.

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the currently approved 20 units of BOTOX and 20 units of Jeuveau ® compared to 40 units of “extra-strength” Jeuveau ® .

Study initiation activity has begun with an open Investigational New Drug (“IND”) application and the first patient is expected to be enrolled in the first quarter of 2022.

We anticipate completing the study in the first half of 2023.

In January 2023, we announced positive interim results from the Phase II clinical trial.

The interim data analysis of the “extra-strength” formulation of Jeuveau ® demonstrated a median duration of at least 26 weeks based on the time for patients to return to their original glabellar line scale score (baseline) and the duration of at least one point improvement on the same scale.

The safety results included 33 adverse events, 88% of which rated as mild and 12% of which rated at moderate.

There were no severe or serious adverse events observed in the safety results.

The trial is expected to be completed in the first half of 2023, and final results will be presented in the second half of 2023.

Manufacturing

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We believe this facility will be sufficient to meet demand for Jeuveau ® for the foreseeable future.

The FDA conducted a current Good Manufacturing Practice, or cGMP, and pre-approval inspection of the facility in November 2017 in connection with our Biologics License Application, or BLA, for Jeuveau ® .

The UK Medicines and Healthcare Products Regulatory Agency, or MHRA, also completed an inspection of the manufacturing facility in February 2018 in connection with our Marketing Authorisation Application, or MAA.

The FDA conducted a current Good Manufacturing Practice, or cGMP, and pre-approval inspection of the facility in November 2017 in connection with our BLA for Jeuveau ® .

The UK Medicines

and Healthcare Products Regulatory Agency, or MHRA, also completed an inspection of the manufacturing facility in February 2018 in connection with our Marketing Authorisation Application, or MAA.

FDA approval of Jeuveau ® in February 2019 included approval to manufacture Jeuveau ® at Daewoong’s facility.

Daewoong License and Supply Agreement

In 2013, we entered into the Daewoong Agreement, pursuant to which Daewoong agreed to manufacture and supply Jeuveau ® and grant us an exclusive license to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit Jeuveau ® for aesthetic indications in the United States, EU, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, Russia, certain members of the Commonwealth of Independent States, or CIS, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan.

In 2013, we entered into the Daewoong Agreement, which has been amended from time to time, pursuant to which Daewoong agreed to manufacture and supply Jeuveau ® and grant us an exclusive license to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit Jeuveau ® for aesthetic indications in the United States, EU, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, certain members of the Commonwealth of Independent States, or CIS, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan.

Under the Daewoong Agreement, we are required to make certain minimum annual purchases in order to maintain the exclusivity of the license.

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The initial term of the Daewoong Agreement expires September 30, 2023, and automatically renews for unlimited additional three-year terms if we meet certain performance requirements.

We expect to meet these performance requirements.

The Daewoong Agreement will terminate (A) upon written notice by either us or Daewoong upon a continuing default that remains uncured within 90 days (or 30 days for a payment default) by the other party, or (B) without notice upon the bankruptcy or insolvency of our company.

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International Trade Commission related to Jeuveau ® (the “ITC Action”) and certain related matters by entering into a Settlement and License Agreement with Medytox and Allergan, which we refer to as the U.S.

Settlement Agreement, and another Settlement and License Agreement with Medytox which we refer to as the ROW Settlement Agreement.

Settlement Agreement, and another Settlement and License Agreement with Medytox, which we refer to as the Medytox Settlement Agreement.

We refer to the U.S.

Settlement Agreement and the ROW Settlement Agreement collectively as the Medytox/Allergan Settlement Agreements.

Under the Medytox/Allergan Settlement Agreements, we agreed to (i) make cash payments of $35.0 million in multiple payments over two years to Allergan and Medytox, of which we paid the first payment of $15.0 million in the third quarter of 2021 and $15.0 million during the first quarter of 2022, with final payment of $5.0 million due in 2023, (ii) pay to Allergan and Medytox royalties on the sale of Jeuveau ® , based on a certain dollar amount per vial sold of Licensed Products by or on our behalf in the United States, from December 16, 2020 to September 16, 2022, (iii) from December 16, 2020 to September 16, 2022, pay Medytox a low-double digit royalty on net sales of Jeuveau ® sold by us or on our behalf in territories we have licensed outside the United States, and (iv) beginning September 16, 2022 to September 16, 2032, we will pay Medytox a mid-single digit royalty percentage on net sales of Jeuveau ® in the United States and all territories we have licensed outside the United States.

We also issued 6,762,652 shares of our common stock to Medytox.

Settlement Agreement and the Medytox Settlement Agreement collectively as the Medytox/Allergan Settlement Agreements.

We have completed all obligations to Allergan and the majority of our obligations to Medytox under the Medytox/Allergan Settlement Agreements.

These completed obligations consisted of (i) cash payments of $35.0 million in multiple payments to Allergan and Medytox, of which we paid $15.0 million in the third quarter of 2021, $15.0 million in the first quarter of 2022, and $5.0 million in the first quarter of 2023, (ii) royalty payments to Allergan and Medytox on the sale of Jeuveau ® , based on a certain dollar amount per vial sold of Licensed Products by or on our behalf in the United States, from December 16, 2020 through September 16, 2022, (iii) royalty payments to Medytox, from December 16, 2020 to September 16, 2022, of a low-double digit percentage of net sales of Jeuveau ® sold by us or on our behalf in territories we have licensed outside the United States, and (iv) the issuance of 6,762,652 shares of our common stock to Medytox.

Going forward, our remaining obligation will be to pay Medytox a mid-single digit royalty percentage on net sales of Jeuveau ® in the United States and all territories we have licensed outside the United States through September 16, 2032.

Our primary competitors are companies offering injectable dose forms of botulinum toxin.

There are only four approved injectable botulinum toxin type A neurotoxins in the United States, including Jeuveau ® .

There are only five approved injectable botulinum toxin type A neurotoxins in the United States, including Jeuveau ® .

There are also other injectable botulinum toxin type A products being developed for the U.S.

We believe the primary competing products in this market include BOTOX, Dysport and Xeomin:

• BOTOX, marketed by Allergan plc, or Allergan, received FDA approval in 2002 for glabellar lines.

We believe the primary competing products in this market include BOTOX, Dysport, Xeomin and Daxxify:

• BOTOX, marketed by Allergan, received FDA approval in 2002 for glabellar lines.

Allergan (now AbbVie) was the first company to market neurotoxins for aesthetic purposes.

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• Xeomin, marketed by Merz Pharma GmbH & Co., or Merz, received FDA approval in 2011 for glabellar lines.

We are also aware that Revance Therapeutics, Inc.

has submitted a BLA to the FDA for an injectable botulinum toxin type A neurotoxin and in October 2021 received a Complete Response Letter from the FDA.

Additionally, Hugel Inc., has submitted

a BLA to the FDA for an injectable botulinum toxin type A neurotoxin.

If either BLA is approved, we expect the competition in the U.S.

• Daxxify, marketed by Revance Therapeutics, Inc., or Revance, received FDA approval in late 2022 for glabellar lines.

Additionally, Hugel Inc., has submitted a BLA to the FDA for an injectable botulinum toxin type A neurotoxin.

If the Hugel BLA is approved, we expect the competition in the U.S.

injectable botulinum toxin market to further increase.

Most of our primary competitors are also approved to sell injectable botulinum toxin type A neurotoxins in Europe and other markets that we may enter.

In addition to the companies commercializing and developing neurotoxins, there are other products and treatments that may indirectly compete with Jeuveau ® , such as dermal fillers, laser treatments, brow lifts, chemical peels, fat injections and cold therapy.

We compete with various companies that have products in these medical aesthetic categories.

Among these companies are Allergan (now AbbVie), Sanofi, Sun Pharma, Valeant Pharmaceuticals International, Inc., or Valeant, Mentor Worldwide LLC, a division of Johnson & Johnson, Merz, Galderma, and Skinceuticals, a division of L’Oreal SA.

Among these companies are Allergan (now AbbVie), Sanofi, Revance, Sun Pharma, Valeant Pharmaceuticals International, Inc., or Valeant, Mentor Worldwide LLC, a division of Johnson & Johnson, Merz, Galderma, and Skinceuticals, a division of L’Oreal SA.

In addition, we are aware of other companies also developing and/or marketing products in one or more of our target markets, including competing injectable botulinum toxin type A formulations that are in various phases of development in North America for the treatment of glabellar lines.

We launched Jeuveau ® into the U.S.

aesthetic neurotoxin market in May 2019.

Given the limited history of the commercialization of Jeuveau ® , the impact of the COVID-19 outbreak and the impact of the ITC remedial orders, we have not observed significant seasonality in our net revenues to date.

However, we are aware that historically the aesthetic neurotoxin market experiences higher revenue in the second and fourth calendar quarters as compared to the first and third calendar quarters.

Historically, given the limited history of the commercialization of Jeuveau ® , the impact of the COVID-19 outbreak and the impact of the ITC remedial orders, we have not observed significant seasonality in our net revenues up to the second half of 2022.

However, we are aware that historically the aesthetic neurotoxin market generally experiences higher revenue in the second and fourth calendar quarters as compared to the first and third calendar quarters.

Government Regulation in the United States

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• purity and potency from results of nonclinical testing and clinical trials;

preserve the biological product’s identity, strength, quality and purity and, if applicable, the FDA’s current good tissue practices for the use of human cellular and tissue products;

• satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity and, if applicable, the FDA’s current good tissue practices for the use of human cellular and tissue products;

• potential FDA audits of the nonclinical study and clinical trial sites that generated the data in support of the BLA;

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• The Foreign Corrupt Practices Act (“FCPA”), which prohibits certain payments made to foreign government officials;

• The Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services relating to healthcare matters;

information related to certain payments or other transfers of value made or distributed to physicians, which is defined broadly to include other healthcare providers, teaching hospitals, and ownership and investment interests held by physicians and their immediate family members;

any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services relating to healthcare matters;

• The Federal Physician Payments Sunshine Act, and its implementing regulations, which require that certain manufacturers of drugs, medical devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report to the CMS information related to certain payments or other transfers of value made or distributed to physicians, which is defined broadly to include other healthcare providers, teaching hospitals, and ownership and investment interests held by physicians and their immediate family members;

• State and foreign law equivalents of the foregoing and state laws regarding pharmaceutical company marketing compliance, reporting and disclosure obligations.

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For example, HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and its implementing regulations, imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” those independent contractors or agents of covered entities that create, receive, maintain, transmit or obtain protected health information in connection with providing a service on behalf of a covered entity.

Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” those independent contractors or agents of covered entities that

create, receive, maintain, transmit or obtain protected health information in connection with providing a service on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.

In addition, state and non-U.S.

laws, including the General Data Protection Regulation adopted by the

EU, govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

laws, including the General Data Protection Regulation adopted by the EU, govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

There are numerous other laws and legislative and regulatory initiatives at the federal and state levels addressing privacy and security concerns.

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Human Capital Resources

As of December 31, 2021, we had 167 employees, all of whom are full-time in the United States and United Kingdom, and 69% of our full-time employees were women.

As of December 31, 2022, we had 215 employees, all of whom were full-time in the United States and United Kingdom, and 70% of our full-time employees were women.

None of our employees are represented by labor unions or covered by collective bargaining agreements, and we have never experienced any work stoppage.

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Attracting and Developing Talent

We believe that our future success largely depends upon our continued ability to attract and retain highly qualified management and technical personnel.

Talent management is critical to our ability to execute on our long-term growth strategy.

To facilitate talent attraction and retention, we strive to make our company a safe and rewarding workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation and benefits, and by programs that build connections among our employees.

We believe that our employees are our greatest asset, and our future success largely depends upon our continued ability to attract and retain high caliber talent.

Talent management is critical to our ability to execute our long-term growth strategy.

To facilitate talent attraction and retention, we strive to make our company a rewarding workplace.

We provide opportunities for our employees to grow and develop in their careers, through professional development, leadership coaching, formal and informal training opportunities, and an annual performance review process to encourage ongoing growth and development.

These opportunities are supported by strong total rewards packages, and by programs that build connections among our employees.

Compensation and Benefits

To attract, retain and recognize talent, we aim to ensure merit-based, equitable compensation practices and strive to provide competitive compensation and benefit packages to our employees.

Our compensation package includes competitive base pay, an annual performance bonus, long-term incentive awards, health care and retirement benefits, paid time off and family leave, among others.

We are committed to a Total Rewards strategy that complements our mission, culture, and business objectives.

Our goal is to provide competitive compensation and benefit programs that drive a high level of employee satisfaction and allow us to attract and retain the best and brightest talent.

We want employees to feel at their best and be at their best so they can make a profound impact on our culture, community and business results.

Compensation and benefits are two of the main pillars of our total rewards package.

We provide total cash compensation (base pay and bonus/commission) that is highly competitive in the labor markets in which we compete for talent.

We also ensure that pay is internally equitable by differentiating rewards based on employee performance and impact to the company.

This empowers employees to take ownership over their career

and development trajectory.

Long-term incentives in the form of equity (Stock Options and RSUs) provide a sense of ownership in the company’s long-term success and help retain talent that can make a difference.

We also provide a robust and highly competitive benefits package to ensure employees’ personal and family needs are met whether it’s health (medical/dental/vision), wealth and retirement (401k with competitive employer match), or well-being (flexible PTO, paid leave, wellness coaching).

We want employees to know that we are investing in their success so they can bring the best version of themselves each day.

Health, Safety and Wellness

We are committed to the health, safety and wellness of our employees.

In response to the COVID-19 pandemic, we implemented changes that we determined were in the best interest of our employees, as well as the communities in which we operate, and which comply with government regulations.

This included requiring our employees and sales professionals to work remotely when required by local jurisdictions, limiting non-essential travel and minimizing in-person work-related meetings.

We provide our employees with access to a variety of health and wellness programs, including programs that support physical and mental health and well-being by providing tools, resources, and coaching to help them improve or maintain a healthy lifestyle.

We maintain a healthy workplace by encouraging employees to work remotely if feeling ill, and by maintaining many of the changes implemented in response to COVID-19 including our hybrid work schedule, access to tests and sanitary supplies.

Inclusion and Belonging

We promote an inclusive culture that values equity, opportunity, and respect.

In 2019, we formed a Culture & Belonging Council comprised of our employees.

In 2019, we formed an employee-led Culture & Belonging Council.

This council has a vision to create and foster a culture that reflects diversity and inclusion so that each of our employees has a sense of belonging as their authentic, unique selves.

In support of our inclusive culture, we provide unconscious bias training to strengthen employee awareness and strive to recruit a diverse talent pool across all levels of the organization.

In support of our inclusive culture, we provide a variety of diversity, equity, and inclusion trainings, including unconscious bias training for employees and managers to strengthen employee awareness and strive to recruit a diverse talent pool across all levels of the organization.

We are an equal opportunity employer and believe that diverse and differentiated views contribute to making us a better organization.

It is our conscious effort to support and promote equal opportunity for all our employees within the workplace.

Our company has been built on the belief and commitment of evolving together.

This applies not only to our employees and customers, but also to the communities in which we operate.

We offer paid volunteer time off to our employees and encourage our team of employees to become involved in their communities, lending their voluntary support to programs that positively impact the quality of life within these communities.

We value the impact of ongoing volunteer opportunities with community partners Orangewood Foundation, Samueli Academy and the Jesse Rees Foundation.

Corporate Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business