Small cap Evolus Inc. (EOLS, Financial) is thinking big, and analysts agree the company can continue to make headway in the $2 billion U.S. market for aesthetics. The 10-year-old Newport Beach, California-based performance beauty company saw sales of its cosmetic neurotoxin Jeuveau jump 75% in 2021 to nearly $100 million.
Granted, that’s small potatoes when lined up against the $5.23 billion AbbVie Inc. (ABBV, Financial) booked for worldwide sales of market leader Botox last year, but several analysts think Jueveau has plenty of upside. In fact, Fierce Pharma reported Mizuho Securities said the Evolus treatment is the fastest-growing med among cosmetic neurotoxins.
Evolus shares could use a facelift. The stock currently trades at $9.45, just about half of its 52-week high and well off its all-time peak of $33 back in July 2018. All four analysts chiming in in March rated the stock a buy with an average target price of more than $15 and a high of $20, according to Yahoo Finance.
Cantor Fitzgerald analysts, for one, think Jeuveau’s value proposition is “under-appreciated,” adding the drug can pick up substantial market share in what they see as a "fast-growing and highly under-penetrated market.”
Evolus’ focus on millennials and the medical spa sector plus investments in co-branding with aesthetic practices “should enable Evolus to outperform the overall aesthetic neurotoxin market growth by about three-fold" this year, Mizuho Securities analysts wrote in a note to clients. They forecast Jeuveau growth of 49%, versus a 16% increase across the market.
While botulinum toxins are used for both aesthetic and therapeutic purposes, Evolus is differentiating itself by going after only aesthetic indications, according to Clarivate PLC (CLVT, Financial), an information and analytics company. This approach offers two key advantages--exclusion from the Physician Payments Sunshine Act and pricing flexibility.
Jeuveau is similar to Botox, allowing Evolus to promote the product as a simple alternative to the AbbVie treatment. This enables clinicians to switch to Jeuveau easily because the products are literally interchangeable.
Evolus plans to leverage its relationship with SCH, a physician-owned private equity firm, to boost the use of Jeuveau. About 250 physicians, consisting predominantly of key opinion leaders in dermatology, plastic surgery and ophthalmology, have an equity stake in SCH. Thus, it’s more than likely that these doctors will recommend the use of Jeuveau over other options.
For 2022, Evolus has guided net revenue of $143 million to $150 million, which equates to 43% to 50% growth over 2021, a rate it said is more than double the industry average.
