0001479290-22-000102 | 10-Q | XBRL Viewer

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Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2022	Oct. 31, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-36297
Entity Registrant Name	Revance Therapeutics, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	77-0551645
Entity Address, Address Line One	1222 Demonbreun Street, Suite 2000
Entity Address, City or Town	Nashville
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37203
City Area Code	615
Local Phone Number	724-7755
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	RVNC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		82,273,582
Entity Central Index Key	0001479290
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
CURRENT ASSETS
Cash and cash equivalents	$ 104,491	$ 110,623
Short-term investments	274,136	114,448
Accounts receivable, net	11,732	3,348
Inventories	17,178	10,154
Prepaid expenses and other current assets	8,057	7,544
Total current assets	415,594	246,117
Property and equipment, net	22,677	24,661
Goodwill	146,964	146,964
Intangible assets, net	42,866	55,334
Operating lease right-of-use assets	40,522	44,340
Finance lease right-of-use asset	10,021	0
Restricted cash	5,921	5,046
Other non-current assets	27,026	8,701
TOTAL ASSETS	711,591	531,163
CURRENT LIABILITIES
Accounts payable	744	10,603
Accruals and other current liabilities	48,007	39,558
Deferred revenue, current	12,481	9,362
Finance lease liability, current	9,396	0
Operating lease liabilities, current	4,104	4,746
Derivative liability	0	3,020
Total current liabilities	74,732	67,289
Debt, non-current	378,889	280,635
Deferred revenue, non-current	75,254	74,152
Operating lease liabilities, non-current	35,518	39,131
Other non-current liabilities	1,485	1,485
TOTAL LIABILITIES	565,878	462,692
Commitments and Contingencies (Note 11)
STOCKHOLDERS’ EQUITY
Convertible preferred stock, par value $0.001 per share — 5,000,000 shares authorized, and no shares issued and outstanding as of September 30, 2022 and December 31, 2021	0	0
Common stock, par value $0.001 per share — 190,000,000 shares authorized both as of September 30, 2022 and December 31, 2021; 82,286,868 and 71,584,057 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	82	72
Additional paid-in capital	1,754,513	1,466,369
Accumulated other comprehensive loss	(460)	(18)
Accumulated deficit	(1,608,422)	(1,397,952)
TOTAL STOCKHOLDERS’ EQUITY	145,713	68,471
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 711,591	$ 531,163

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	190,000,000	190,000,000
Common stock, shares issued (in shares)	82,286,868	71,584,057
Common stock, shares outstanding (in shares)	82,286,868	71,584,057

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue:
Total revenue	$ 29,015	$ 19,745	$ 82,644	$ 51,848
Operating expenses:
Selling, general and administrative	65,775	52,782	158,697	152,385
Research and development	26,103	30,095	81,745	86,787
Amortization	3,885	3,705	11,597	10,219
Total operating expenses	106,499	92,468	280,191	264,920
Loss from operations	(77,484)	(72,723)	(197,547)	(213,072)
Interest income	1,165	84	1,860	266
Interest expense	(6,917)	(1,571)	(12,722)	(4,700)
Changes in fair value of derivative liability	(875)	(20)	(980)	(98)
Other income (expense), net	118	(146)	(381)	(608)
Loss before income taxes	(83,993)	(74,376)	(209,770)	(218,212)
Income tax provision	(700)	0	(700)	0
Net loss	(84,693)	(74,376)	(210,470)	(218,212)
Unrealized loss	(74)	(1)	(442)	(3)
Comprehensive loss	(84,767)	(74,377)	(210,912)	(218,215)
Basic net loss	(84,693)	(74,376)	(210,470)	(218,212)
Diluted net loss	$ (84,693)	$ (74,376)	$ (210,470)	$ (218,212)
Basic net loss (in dollars per share)	$ (1.17)	$ (1.10)	$ (3.00)	$ (3.24)
Diluted net loss (in dollars per share)	$ (1.17)	$ (1.10)	$ (3.00)	$ (3.24)
Basic weighted-average number of shares used in computing net loss per share (in shares)	72,208,285	67,782,033	70,215,148	67,297,954
Diluted weighted-average number of shares used in computing net loss per share (in shares)	72,208,285	67,782,033	70,215,148	67,297,954
Product revenue
Revenue:
Total revenue	$ 26,081	$ 18,296	$ 72,401	$ 46,982
Operating expenses:
Cost of product revenue /service revenue (exclusive of amortization)	8,681	5,827	24,130	15,453
Collaboration revenue
Revenue:
Total revenue	970	1,129	6,197	4,034
Service revenue
Revenue:
Total revenue	1,964	320	4,046	832
Operating expenses:
Cost of product revenue /service revenue (exclusive of amortization)	$ 2,055	$ 59	$ 4,022	$ 76

Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment	Other Accumulated Comprehensive Loss	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment
Beginning Balance (in shares) at Dec. 31, 2020		0	69,178,666			0	0
Beginning Balance at Dec. 31, 2020		$ 0	$ 69	$ 1,500,514	$ (108,509)	$ 0	$ (1,126,293)	$ 9,651
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in connection with offerings (in shares)			761,526
Issuance of common stock in connection with at-the-market offerings			$ 1	21,553
Issuance of common stock relating to employee stock purchase plan (in shares)			91,562
Issuance of common stock relating to employee stock purchase plan				2,206
Issuance of common stock upon exercise of stock options (in shares)			921,376
Issuance of common stock upon exercise of stock options			$ 1	12,823
Issuance of restricted stock awards and performance stock awards, net of cancellation (in shares)			1,136,221
Issuance of restricted stock awards and performance stock awards, net of cancellation			$ 1	(1)
Shares withheld related to net settlement of restricted stock awards (in shares)			(250,574)
Shares withheld related to net settlement of restricted stock awards				(6,944)
Stock-based compensation				$ 33,305
Unrealized loss	$ (3)					$ (3)
Net loss	$ (218,212)						$ (218,212)
Ending Balance (in shares) at Sep. 30, 2021	71,838,777		71,838,777	0		0	0
Ending Balance at Sep. 30, 2021	$ 120,162		$ 72	$ 1,454,947		$ (3)	$ (1,334,854)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]	Accounting Standards Update 2020-06 [Member]
Beginning Balance (in shares) at Jun. 30, 2021		0	71,798,624			0	0
Beginning Balance at Jun. 30, 2021		$ 0	$ 72	1,446,643		$ (2)	$ (1,260,478)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in connection with at-the-market offerings				(70)
Issuance of common stock upon exercise of stock options (in shares)			41,900
Issuance of common stock upon exercise of stock options				314
Issuance of restricted stock awards and performance stock awards, net of cancellation (in shares)			99,965
Shares withheld related to net settlement of restricted stock awards (in shares)			(101,712)
Shares withheld related to net settlement of restricted stock awards				(2,694)
Stock-based compensation				$ 10,754
Unrealized loss	$ (1)					$ (1)
Net loss	$ (74,376)						$ (74,376)
Ending Balance (in shares) at Sep. 30, 2021	71,838,777		71,838,777	0		0	0
Ending Balance at Sep. 30, 2021	$ 120,162		$ 72	$ 1,454,947		$ (3)	$ (1,334,854)
Beginning Balance (in shares) at Dec. 31, 2021	71,584,057	0	71,584,057			0	0
Beginning Balance at Dec. 31, 2021	$ 68,471	$ 0	$ 72	1,466,369		$ (18)	$ (1,397,952)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in connection with follow on offering, net of issuance costs (in shares)			9,200,000
Issuance of common stock in connection with offerings, net of issuance cost			$ 9
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs				215,921
Issuance of common stock in connection with offerings (in shares)			1,734,853
Issuance of common stock in connection with at-the-market offerings			$ 1	31,554
Issuance of common stock relating to employee stock purchase plan (in shares)			171,824
Issuance of common stock relating to employee stock purchase plan				2,018
Issuance of common stock upon exercise of stock options (in shares)			122,377
Issuance of common stock upon exercise of stock options				621
Issuance of restricted stock awards and performance stock awards, net of cancellation (in shares)			(257,611)
Shares withheld related to net settlement of restricted stock awards (in shares)			(268,632)
Shares withheld related to net settlement of restricted stock awards				(4,613)
Stock-based compensation				42,295
Other				$ 348
Unrealized loss	(442)					$ (442)
Net loss	$ (210,470)						$ (210,470)
Ending Balance (in shares) at Sep. 30, 2022	82,286,868		82,286,868	0		0	0
Ending Balance at Sep. 30, 2022	$ 145,713		$ 82	$ 1,754,513		$ (460)	$ (1,608,422)
Beginning Balance (in shares) at Jun. 30, 2022		0	73,123,363	0		0	0
Beginning Balance at Jun. 30, 2022		$ 0	$ 73	$ 1,521,411		$ (386)	$ (1,523,729)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in connection with follow on offering, net of issuance costs (in shares)			9,200,000
Issuance of common stock in connection with offerings, net of issuance cost			$ 9
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs				215,921
Issuance of common stock in connection with at-the-market offerings				(31)
Issuance of common stock upon exercise of stock options (in shares)			91,743
Issuance of common stock upon exercise of stock options				512
Issuance of restricted stock awards and performance stock awards, net of cancellation (in shares)			(44,752)
Shares withheld related to net settlement of restricted stock awards (in shares)			(83,486)
Shares withheld related to net settlement of restricted stock awards				(1,853)
Stock-based compensation				$ 18,553
Unrealized loss	(74)					$ (74)
Net loss	$ (84,693)						$ (84,693)
Ending Balance (in shares) at Sep. 30, 2022	82,286,868		82,286,868	0		0	0
Ending Balance at Sep. 30, 2022	$ 145,713		$ 82	$ 1,754,513		$ (460)	$ (1,608,422)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (210,470)	$ (218,212)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	41,613	32,513
Depreciation and amortization	16,266	14,434
Amortization of finance lease right-of-use asset	4,502	0
Amortization of debt discount and debt issuance costs	1,373	935
Amortization of discount on investments	(399)	(16)
Other non-cash operating activities	1,265	140
Changes in operating assets and liabilities:
Accounts receivable	(8,384)	171
Inventories	(6,606)	(4,316)
Prepaid expenses and other current assets	(947)	5,141
Lease right-of-use assets	(10,705)	(15,901)
Other non-current assets	(297)	(7,537)
Accounts payable	(9,711)	(4,578)
Accruals and other liabilities	3,928	5,784
Deferred revenue	4,222	(447)
Lease liabilities	10,984	13,712
Other non-current liabilities	0	1,250
Net cash used in operating activities	(163,366)	(176,927)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments	(321,199)	(178,588)
Finance lease prepayments	(17,820)	(7,700)
Purchases of property and equipment	(1,922)	(6,018)
Proceeds from maturities of investments	161,183	135,000
Net cash used in investing activities	(179,758)	(57,306)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock in connection with follow-on offering, net of discounts and commissions	216,200	0
Proceeds from issuance of notes payable, net of debt discount	98,150	0
Proceeds from issuance of common stock in connection with at-the-market offerings, net of commissions	31,814	21,706
Proceeds from the exercise of stock options and employee stock purchase plan	2,639	15,029
Principal payments on finance lease obligations	(5,000)	0
Taxes paid related to net settlement of restricted stock awards	(4,613)	(6,944)
Payment of debt issuance costs and offering costs	(1,671)	(327)
Other financing activities	348	0
Net cash provided by financing activities	337,867	29,464
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(5,257)	(204,769)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	115,669	337,003
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	110,412	132,234
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION:
Accrued debt issuance costs and offering costs	749	0
Capitalized stock-based compensation	682	792
Property and equipment purchases included in accounts payable and accruals	$ 342	$ 1,206

The Company and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
The Company and Summary of Significant Accounting Policies	The Company and Summary of Significant Accounting Policies The Company Revance is a biotechnology company focused on developing and commercializing innovative aesthetic and therapeutic offerings. Revance’s aesthetics portfolio includes DAXXIFY™ (DaxibotulinumtoxinA-lanm) for injection, the RHA® Collection of dermal fillers from Teoxane SA (“Teoxane”) and OPUL®, a relational commerce platform for aesthetic practices. Revance has also partnered with Viatris Inc. to develop a biosimilar to BOTOX®, which would compete in the existing short-acting neuromodulator marketplace. Revance’s therapeutics pipeline is currently focused on muscle movement disorders, including evaluating DAXXIFY™ in two debilitating conditions, cervical dystonia and upper limb spasticity. Since inception, we have devoted substantial efforts to identifying and developing product candidates for the aesthetic and therapeutic pharmaceutical markets, recruiting personnel, raising capital, conducting preclinical and clinical development of, and manufacturing development for DAXXIFY™, DaxibotulinumtoxinA Topical, the onabotulinumtoxinA biosimilar, obtaining regulatory approval of DAXXIFY™ and the commercial launch of our products and services. As a result, we have incurred net losses and net cash outflows from operations. For the three and nine months ended September 30, 2022, we had a net loss of $84.7 million and $210.5 million, respectively. As of September 30, 2022, we had a working capital surplus of $340.9 million and an accumulated deficit of $1.6 billion. In recent years, we have funded our operations primarily through the sale of common stock, convertible senior notes, payments received from collaboration arrangements, sales of the RHA® Collection of dermal fillers and, in March 2022, we received the proceeds from notes issued in an aggregate principal amount of $100.0 million pursuant to the Note Purchase Agreement (defined in Note 8). As of September 30, 2022, we had capital resources of $378.6 million consisting of cash, cash equivalents, short-term investments. Since the FDA approval of DAXXIFY™ for the temporary improvement of moderate to severe glabellar lines in September 2022, we are eligible to draw on the Second Tranche (defined in Note 8) of $100.0 million in full under the Note Purchase Agreement provided certain conditions are met. We may also sell up to $150.0 million of our common stock under the 2022 ATM Agreement (defined in Note 9). Based on our updated evaluation of our ability to continue as a going concern, we have concluded that the factors which previously raised substantial doubt about our ability to continue as a going concern no longer exist as of the issuance date of this Report. We believe that our existing capital resources will be sufficient to fund the operating plan through at least the next 12 months following the issuance of this Report. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements are unaudited, and reflect all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the interim periods presented. Our condensed consolidated balance sheet for the year ended December 31, 2021 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”). The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2021, or any other future period. Our condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission (the “SEC”), on February 28, 2022. Our condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries, and have been prepared in conformity with U.S. GAAP. All intercompany transactions have been eliminated. Use of Estimates & Risks and Uncertainties The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, the incremental borrowing rate used to measure operating lease and finance lease liabilities, the recoverability of goodwill and long-lived assets, useful lives associated with property and equipment and intangible assets, the period of benefit associated with deferred costs, revenue recognition (including the timing of satisfaction of performance obligations, estimating variable consideration, estimating stand-alone selling prices of promised goods and services, and allocation of transaction price to performance obligations), deferred revenue classification, accruals for clinical trial costs, valuation and assumptions underlying stock-based compensation and other equity instruments, and income taxes. The full extent of the impact of the COVID-19 pandemic on our future operational and financial performance will depend on future developments that are highly uncertain, including variant strains of the virus and the degree of their vaccine resistance and as a result of new information that may emerge concerning COVID-19, the actions taken to contain or treat it, and the duration and intensity of the related effects. The ongoing COVID-19 pandemic has and may continue to negatively affect global economic activity, the regulatory approval process for our product candidates, our supply chain, research and development activities, end user demand for our products and services and commercialization activities. For example, the timing of the FDA’s inspection of our manufacturing facility as a part of the regulatory approval process for DAXXIFY™ was delayed due to the FDA’s travel restrictions associated with the COVID-19 pandemic. We cannot be certain of the continued impact of the COVID-19 pandemic on the timing of the regulatory approval process for DAXXIFY™ in indications other than glabellar lines or on any supplemental biologics license applications (each, a “BLA”) or post-approval supplements we may file. As of the date of issuance of these condensed consolidated financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our condensed consolidated financial statements. Inventory Inventories consist of raw materials, work in process, and finished goods held for sale to customers. Cost is determined using the first-in-first-out (FIFO) method. Inventory costs include raw materials, labor, quality control, and overhead associated with the cost of production. Inventory valuation reserves are established based on a number of factors including, but not limited to, inventory not conforming to product specifications, product excess and obsolescence, or application of the lower of cost or net realizable value concepts. The determination of events requiring the establishment of inventory valuation reserves, together with the calculation of the amount of such reserves, may require judgment. No inventory valuation reserves have been recorded for any periods presented. Products manufactured at a third-party contract manufacturer site prior to that site’s regulatory approval may be capitalized as inventory when the future economic benefit is deemed highly probable. A number of factors are considered in determining probability, including the historical experience of achieving regulatory approvals for the manufacturing process, the progress along the approval process, the shelf life of the product, and any other impediments identified. If the criteria for capitalizing inventory are not met, the pre-approval manufacturing costs of products are recognized as research and development expense in the period incurred. No inventories from any third-party contract manufacturer have been recognized for any periods presented. Leases We account for a contract as a lease when it has an identified asset that is physically distinct and we have the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. We determine if an arrangement is a lease or contains a lease at inception. For arrangements that meet the definition of a lease, we determine the initial classification and measurement of our right-of-use asset and lease liability at the lease commencement date and thereafter if modified. We do not recognize right-of-use assets or lease liabilities for those leases that qualify as a short-term lease. The lease term includes any renewal options that we are reasonably assured to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, we use our estimated secured incremental borrowing rate for that lease term. For our real estate operating leases, rent expense is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in operating expenses in the condensed consolidated statements of operations and comprehensive loss. In addition to rent, the real estate operating leases may require us to pay additional amounts for variable lease costs which includes taxes, insurance, maintenance, and other expenses, and the variable lease costs are generally referred to as non-lease components. For real estate operating leases, we account for lease and non-lease components separately. For a finance lease for a manufacturing fill-and-finish line, interest expense from fixed payments on finance lease is recognized using the effective interest method. Finance lease right-of-use asset amortization is recorded within research and development expense on the condensed consolidated statements of operations and comprehensive loss, and finance lease liability interest expense is recorded in the interest expense on the condensed consolidated statements of operations and comprehensive loss. For our manufacturing fill-and-finish line asset group, we have elected to apply the practical expedient and account for the lease and non-lease components as a single lease component. Variable lease costs related to finance leases are expensed as research and development expense as incurred. Recent Accounting Pronouncements The recent accounting pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our present or future financial statements.

Revenue

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Our revenue is primarily generated from U.S. customers. Our product and collaboration revenue is generated from the Product Segment, and our service revenue is generated from the Service Segment (Note 12). The following tables present our revenue disaggregated by the timing of transfer of goods or services:


	Three Months Ended September 30, 2022								Nine Months Ended September 30, 2022
(in thousands)	Product Revenue		Collaboration Revenue		Service Revenue		Total		Product Revenue		Collaboration Revenue		Service Revenue		Total
Timing of revenue recognition:
Transferred at a point in time	$	26,081	$	—	$	121	$	26,202	$	72,401	$	—	$	360	$	72,761
Transferred over time	—		970		1,843		2,813		—		6,197		3,686		9,883
Total	$	26,081	$	970	$	1,964	$	29,015	$	72,401	$	6,197	$	4,046	$	82,644


	Three Months Ended September 30, 2021								Nine Months Ended September, 2021
(in thousands)	Product Revenue		Collaboration Revenue		Service Revenue		Total		Product Revenue		Collaboration Revenue		Service Revenue		Total
Timing of revenue recognition:
Transferred at a point in time	$	18,296	$	—	$	166	$	18,462	$	46,982	$	—	$	379	$	47,361
Transferred over time	—		1,129		154		1,283		—		4,034		453		4,487
Total	$	18,296	$	1,129	$	320	$	19,745	$	46,982	$	4,034	$	832	$	51,848

Product Revenue

For the three and nine months ended September 30, 2022 and 2021, product revenue was generated from the sale of the RHA® Collection of dermal fillers.

Receivables and contract liabilities from contracts with our product customers are as follows:


	September 30,		December 31,
(in thousands)	2022		2021
Receivables:
Accounts receivable, net	$	5,341	$	3,297
Total accounts receivable, net	$	5,341	$	3,297

Contract liabilities:
Deferred revenue, current	$	2,491	$	1,331
Total contract liabilities	$	2,491	$	1,331

Collaboration Revenue

Viatris Collaboration and License Agreement

Agreement Terms

We entered into a collaboration and license agreement with Viatris (the “Viatris Collaboration”) in February 2018, pursuant to which we are collaborating with Viatris exclusively, on a world-wide basis (excluding Japan), to develop, manufacture, and commercialize an onabotulinumtoxinA biosimilar.

Viatris has paid us an aggregate of $60 million in non-refundable upfront and milestone fees as of September 30, 2022, and the agreement provides for additional remaining contingent payments of up to $70 million in the aggregate, upon the achievement of certain clinical and regulatory milestones and of specified, tiered sales milestones of up to $225 million. The payments do not represent a financing component for the transfer of goods or services. In addition, Viatris is required to pay us low to mid-double digit royalties on any sales of the biosimilar in the U.S., mid-double digit royalties on any sales in Europe, and high single digit royalties on any sales in other ex-U.S. Viatris territories. However, we have agreed to waive royalties for U.S. sales, up to a maximum of $50 million in annual sales, during the first approximately four years after commercialization to defray launch costs.

Revenue Recognition

We re-evaluate the transaction price at each reporting period. We estimated the transaction price for the Viatris Collaboration using the most likely amount method. In order to determine the transaction price, we evaluated all of the payments to be received during the duration of the contract, which included milestones and consideration payable by Viatris. Other than the upfront payment, all other milestones and consideration we may earn under the Viatris Collaboration are subject to uncertainties related to development achievements, Viatris’ rights to terminate the agreement, and estimated effort for cost-sharing payments. Components of such estimated effort for cost-sharing payments include both internal and external costs. Consequently, the transaction price does not include any milestones and considerations that, if included, could result in a probable significant reversal of revenue when related uncertainties become resolved. Sales-based milestones and royalties are not included in the transaction price until the sales occur because the underlying value relates to the license and the license is the predominant feature in the Viatris Collaboration. As of September 30, 2022, the transaction price allocated to the unfulfilled performance obligations was $92.6 million.

We recognize revenue and estimate deferred revenue based on the cost of development services incurred over the total estimated cost of development services to be provided for the development period. For revenue recognition purposes, the development period is estimated to be completed in 2026. It is possible that this period will change and is assessed at each reporting date.

For the three and nine months ended September 30, 2022, we recognized revenue related to development services of $1.0 million and $6.2 million, respectively. For the three and nine months ended September 30, 2021, we recognized revenue related to development services of $1.1 million and $4.0 million, respectively.

Fosun License Agreement

Agreement Terms

In December 2018, we entered into a license agreement (the “Fosun License Agreement”) with Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd., a wholly-owned subsidiary of Shanghai Fosun Pharmaceutical (Group) Co., Ltd (“Fosun”), whereby we granted Fosun the exclusive rights to develop and commercialize DAXXIFY™ in mainland China, Hong Kong and Macau (the “Fosun Territory”) and certain sublicense rights.

As of September 30, 2022, Fosun has paid us non-refundable upfront and other payments totaling $31.0 million before foreign withholding taxes. In accordance with the Fosun License Agreement, we are eligible to receive a milestone payment $7.0 million before foreign withholding taxes upon the FDA approval of the BLA of DAXXIFY™, which was approved in September 2022. We recorded this milestone payment in “accounts receivable, net” on the condensed consolidated balance sheets as of September 30, 2022, and the payment was received in November 2022. We are also eligible to receive (i) additional remaining contingent payments of up to $222.5 million upon the achievement of certain milestones based on the first calendar year net sales, and (ii) tiered royalty payments in low double digits to high teen percentages on annual net sales. The royalty percentages are subject to reduction in the event that (i) we do not have any valid and unexpired patent claims that cover the product in the Fosun Territory, (ii) biosimilars of the product are sold in the Fosun Territory or (iii) Fosun needs to pay compensation to third parties to either avoid patent infringement or market the product in the Fosun Territory.

Revenue Recognition

We estimated the transaction price for the Fosun License Agreement using the most likely amount method. We evaluated all of the variable payments to be received during the duration of the contract, which included payments from specified milestones, royalties, and estimated supplies to be delivered. We will re-evaluate the transaction price at each reporting period and upon a change in circumstances. As of September 30, 2022, the transaction price allocated to unfulfilled performance obligation was $38.0 million.

For the three and nine months ended September 30, 2022 and 2021, no revenue was recognized from the Fosun License Agreement.

Receivables and contract liabilities from contracts with our collaboration customers are as follows:


	September 30,		December 31,
(in thousands)	2022		2021
Receivables:
Accounts receivable, net — Fosun	$	6,300	$	—
Total accounts receivable, net	$	6,300	$	—

Contract liabilities:
Deferred revenue, current — Viatris	$	9,930	$	7,927

Total contract liabilities, current	$	9,930	$	7,927

Deferred revenue, non-current — Viatris	$	37,259	$	43,157
Deferred revenue, non-current — Fosun	37,995		30,995
Total contract liabilities, non-current	$	75,254	$	74,152

Changes in our contract liabilities from contracts with our collaboration revenue customers for the nine months ended September 30, 2022 are as follows:


	(in thousands)
Balance on January 1, 2022	$	82,079
Revenue recognized	6,197
Billings and adjustments, net	(3,092)
Balance on September 30, 2022	$	85,184

Service Revenue

We offer customer payment processing and certain value-added services to aesthetic practices through the HintMD Platform, the legacy fintech platform, and OPUL®, the next-generation relational commerce platform (together with the HintMD Platform, the “Fintech Platform”). Generally, revenue related to the HintMD Platform payment processing service is recognized at a point in time and revenue related to the OPUL® payment processing service is recognized over time. For the Fintech Platform, revenue related to the value-added services component is recognized over time.

Receivables and contract liabilities from contracts with our service customers are as follows:


	September 30,		December 31,
(in thousands)	2022		2021
Accounts receivable, net	$	91	$	51




Total accounts receivable, net	$	91	$	51

Contract liabilities:
Deferred revenue, current	$	60	$	104
Total contract liabilities, current	$	60	$	104

Cash Equivalents and Short-Term Investments

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Cash Equivalents and Short-Term Investments

The following table is a summary of our cash equivalents and short-term investments:


	September 30, 2022								December 31, 2021
in thousands	Cost		Gains		Losses		Fair Value		Cost		Losses		Fair Value
U.S. treasury securities	$	134,772	$	1	$	(187)	$	134,586	$	—	$	—	$	—
Commercial paper	92,616		—		—		92,616		87,964		—		87,964
Corporate bonds	60,621		—		(265)		60,356		26,502		(18)		26,484
Money market funds	43,883		—		—		43,883		90,355		—		90,355
U.S. government agency obligations	29,806		—		—		29,806		—		—		—
Yankee debt securities	3,024		—		(9)		3,015		—		—		—
Total cash equivalents and available-for-sale securities	$	364,722	$	1	$	(461)	$	364,262	$	204,821	$	(18)	$	204,803

Classified as:
Cash equivalents							$	90,126					$	90,355
Short-term investments							274,136						114,448
Total cash equivalents and available-for-sale securities							$	364,262					$	204,803

As of September 30, 2022 and December 31, 2021, we have no other-than-temporary impairments on our available-for-sale securities, and the contractual maturities of the available-for-sale securities are less than one-year.

Intangible Assets, net

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, net

The following table sets forth the major categories of intangible assets and the weighted-average remaining useful lives for those assets that are not already fully amortized:


	September 30, 2022							December 31, 2021
(in thousands, except for in years)	Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Distribution rights	1.7	$	32,334	$	(18,861)	$	13,473	2.4	$	32,334	$	(12,799)	$	19,535
Developed technology	4.1	35,800		(11,128)		24,672		4.9	35,800		(6,653)		29,147
Customer relationships	1.8	10,300		(5,579)		4,721		2.6	10,300		(3,648)		6,652
Total intangible assets		$	78,434	$	(35,568)	$	42,866		$	78,434	$	(23,100)	$	55,334

Aggregate amortization expense for the intangible assets presented in the condensed consolidated statements of operations and comprehensive loss are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Amortization (1)	$	3,513	$	3,512	$	10,538	$	9,862
Selling, general and administrative	644		653		1,931		1,990
Total amortization expense	$	4,157	$	4,165	$	12,469	$	11,852

(1)The amortization expense related to Distribution rights and Developed technology was recorded to amortization in the condensed consolidated statement of operations and comprehensive loss.

Based on the amount of intangible assets as of September 30, 2022, the expected amortization expense for each of the next five fiscal years was as follows:


Year Ending December 31,	(in thousands)
2022 remaining three months	$	4,157
2023	16,625
2024	10,837
2025	5,967
2026	4,606
2027	674
Total	$	42,866

Inventories

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventories

InventoriesInventories consist of the following:


	September 30,		December 31,
(in thousands)	2022		2021
Raw materials	$	57	$	—
Work in process	2,356		—
Finished goods	14,765		10,154
Total inventories	$	17,178	$	10,154

Balance Sheet Components

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Balance Sheet Components

Accruals and Other Current Liabilities

Accruals and other current liabilities consist of the following:


	September 30,		December 31,
(in thousands)	2022		2021
Compensation	$	23,333	$	22,761
Selling, general and administrative	9,539		5,688
Inventories	5,653		456
Research and development	5,295		5,152
Clinical trials	1,842		2,172
Other current liabilities	1,716		1,442
Interest expense	629		1,887
Total accruals and other current liabilities	$	48,007	$	39,558

Property and Equipment, net

Property and equipment, net consists of the following:


	September 30,		December 31,
(in thousands)	2022		2021
Manufacturing and other equipment	$	21,774	$	20,277
Platform and computer software	13,736		11,671
Leasehold improvements	7,533		7,481
Computer equipment	3,506		3,558
Furniture and fixtures	1,677		1,893
Other construction in progress	1,503		3,110
Total property and equipment	49,729		47,990
Less: Accumulated depreciation and amortization	(27,052)		(23,329)
Total property and equipment, net	$	22,677	$	24,661

Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Operating Leases

Our operating leases primarily consist of non-cancellable facilities leases for research, manufacturing, and administrative functions. Our non-cancellable facilities operating leases have original lease periods expiring between 2027 and 2034, and include one or more options to renew for 7 years to 14 years. The monthly payments for our operating leases escalate over the remaining lease term. Our lease contracts do not contain termination options, residual value guarantees or restrictive covenants.

Finance Lease

Our finance lease represents a dedicated fill-and-finish line for the manufacturing of DAXXIFY™. In March 2017, we entered into, and in December 2020, we amended the Technology Transfer, Validation and Commercial Fill/Finish Services Agreement with Ajinomoto Althea, Inc. dba Aji Bio-Pharma Services, a contract development and manufacturing organization (“ABPS”) (as amended, the “ABPS Agreement”). The ABPS Agreement contains a lease, which commenced in January 2022, related to a dedicated fill-and-finish line for the manufacturing of DAXXIFY™ because it has an identified asset that is physically distinct for which we have the right of control as defined under ASC 842. The right of control is conveyed because the embedded lease provides us with both (1) the right to obtain substantially all of the economic benefit from the fill-and-finish line resulting from the exclusivity of the dedicated manufacturing capacity and (2) the right to direct the use of the fill-and-finish line through our purchase orders to ABPS. Under the ABPS Agreement, until May 2022, we were subject to minimum purchase obligations of up to $30.0 million for each of the years ending December 31, 2022, 2023 and 2024. Each party has the right to terminate the ABPS Agreement without cause, with an 18-month written notice to the other party. The lease is classified as a finance lease in the condensed consolidated balance sheets.

In May 2022, we amended a statement of work under the ABPS Agreement pursuant to which the minimum purchase obligations of $30.0 million per year were eliminated, and instead the minimum purchase obligations would be negotiated prior to the beginning of each year over the term of the agreement. As a result of the amended statement of work, the finance lease was modified. The primary change was that the modification reflects payments in 2023 and 2024 as variable lease payments and excludes such payments in the present value calculation in arriving at the remaining finance lease liabilities with a corresponding adjustment to the related right-of-use asset, among other considerations and changes.

The operating and finance lease costs are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Finance lease:
Amortization of finance lease right-of-use asset	$	3,344	$	—	$	4,502	$	—
Variable lease cost - finance lease(1)	1,134		—		1,375		—
Interest on finance lease liability	348		—		2,607		—
Total finance lease costs	4,826		—		8,484		—
Operating leases:
Operating lease cost	2,223		2,224		6,669		5,802
Variable lease cost - operating leases(2)	423		385		1,288		1,016
Total operating lease costs	2,646		2,609		7,957		6,818
Total lease cost	$	7,472	$	2,609	$	16,441	$	6,818

(1)Variable lease cost includes validation, qualification, materials, and other non-commercial related services which are not included in the lease liabilities and are expensed as incurred.

(2)Variable lease cost includes management fees, common area maintenance, property taxes, and insurance, which are not included in the lease liabilities and are expensed as incurred.

As of September 30, 2022, maturities of our lease liabilities are as follows:


(in thousands)	Finance Lease		Operating Leases		Total
Year Ending December 31,
2022 remaining three months	$	8,523	$	1,218	$	9,741
2023	990		8,468		9,458
2024	—		8,723		8,723
2025	—		8,981		8,981
2026	—		9,242		9,242
2027 and thereafter	—		17,146		17,146
Total lease payments	9,513		53,778		63,291
Less imputed interest	(117)		(14,156)		(14,273)
Present value of lease payments	$	9,396	$	39,622	$	49,018

Our lease contracts do not provide a readily determinable implicit rates, as such, we used the estimated incremental borrowing based on the information available at the adoption or commencement dates. As of September 30, 2022, remaining lease terms and discount rates are as follows:


	Finance Leases		Operating Leases
Weighted-average remaining lease term (years)	2.3		7.8
Weighted-average discount rate	8.5	%	9.8	%

Supplemental cash flow information related to the leases was as follows:


	Nine Months Ended September 30,
(in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	6,259	$	7,956
Operating cash flows from finance leases	$	2,541	$	—
Financing cash flows from finance leases	$	5,000	$	—
Right-of-use assets obtained in exchange for lease liabilities
Finance lease	$	14,523	$	—
Operating leases	$	—	$	18,855

Leases Not Yet Commenced

LSNE Agreement

In April 2021, we and Lyophilization Services of New England, Inc. (“LSNE”), a contract development and manufacturing services organization, entered into a commercial supply agreement (the “LSNE Agreement”) pursuant to which LSNE would serve as a non-exclusive manufacturer and supplier of our products (the “Products”). The initial term of the LSNE Agreement is dependent upon the date of regulatory submission for the manufacturing of the applicable Product and may be terminated by either party in accordance with the terms of the LSNE Agreement. The term of the LSNE Agreement may also be extended for one additional three-year term upon mutual agreement of the parties.

The LSNE Agreement may contain a lease related to a dedicated fill-and-finish line and closely related assets for the manufacturing of the Products because it has identified assets that are physically distinct for which we will have the right of control as defined under ASC 842. The right of control is conveyed because the embedded lease will provide us with both (1)

the right to obtain substantially all of the economic benefit from the fill-and-finish line resulting from the exclusivity implied from the dedicated manufacturing capacity and (2) the right to direct the use of the fill-and-finish line.

The embedded lease had not yet commenced as of September 30, 2022. The accounting commencement and recognition of the right-of-use lease assets and lease liabilities related to the embedded lease will take place when we have substantively obtained the right of control. The embedded lease is preliminarily classified as a finance lease.

Pursuant to the LSNE Agreement, we are responsible for certain costs associated with the design, equipment procurement and validation, and facilities-related costs, monthly payments and minimum purchase obligations throughout the initial term of the LSNE Agreement. As of September 30, 2022, we have made prepayments of $25.5 million to LSNE which is recorded within “other non-current assets” in the condensed consolidated balance sheets. Based on our best estimate as of September 30, 2022, our remaining commitment under the LSNE Agreement will be $2.0 million for 2022, $7.7 million for 2023, $14.4 million for 2024, $18.3 million for 2025, $25.3 million for 2026, and $164.0 million for 2027 and thereafter in aggregate.

Nashville Lease Expansion Premises

In November 2020, we entered into a non-cancelable operating lease for an office space in Nashville, Tennessee (the “Nashville Lease”), which commenced and was recognized on the condensed consolidated balance sheets in June 2021. In July 2021, we entered into the Second Amendment to the Nashville Lease, which provided for the expansion of the initial premises to include an additional 30,591 square feet (the “Expansion Premises”). The lease commencement date of the Expansion Premises has not occurred and is expected to take place when the office space is made available to us after the completion of certain improvement work. The monthly base rent payments for the lease escalate over the term. The total undiscounted basic rent payments currently determinable for the Expansion Premises are $16 million with an expected term to 2034.

Leases

Operating Leases

Finance Lease

The operating and finance lease costs are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Finance lease:
Amortization of finance lease right-of-use asset	$	3,344	$	—	$	4,502	$	—
Variable lease cost - finance lease(1)	1,134		—		1,375		—
Interest on finance lease liability	348		—		2,607		—
Total finance lease costs	4,826		—		8,484		—
Operating leases:
Operating lease cost	2,223		2,224		6,669		5,802
Variable lease cost - operating leases(2)	423		385		1,288		1,016
Total operating lease costs	2,646		2,609		7,957		6,818
Total lease cost	$	7,472	$	2,609	$	16,441	$	6,818

(1)Variable lease cost includes validation, qualification, materials, and other non-commercial related services which are not included in the lease liabilities and are expensed as incurred.

(2)Variable lease cost includes management fees, common area maintenance, property taxes, and insurance, which are not included in the lease liabilities and are expensed as incurred.

As of September 30, 2022, maturities of our lease liabilities are as follows:


(in thousands)	Finance Lease		Operating Leases		Total
Year Ending December 31,
2022 remaining three months	$	8,523	$	1,218	$	9,741
2023	990		8,468		9,458
2024	—		8,723		8,723
2025	—		8,981		8,981
2026	—		9,242		9,242
2027 and thereafter	—		17,146		17,146
Total lease payments	9,513		53,778		63,291
Less imputed interest	(117)		(14,156)		(14,273)
Present value of lease payments	$	9,396	$	39,622	$	49,018


	Finance Leases		Operating Leases
Weighted-average remaining lease term (years)	2.3		7.8
Weighted-average discount rate	8.5	%	9.8	%

Supplemental cash flow information related to the leases was as follows:


	Nine Months Ended September 30,
(in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	6,259	$	7,956
Operating cash flows from finance leases	$	2,541	$	—
Financing cash flows from finance leases	$	5,000	$	—
Right-of-use assets obtained in exchange for lease liabilities
Finance lease	$	14,523	$	—
Operating leases	$	—	$	18,855

Leases Not Yet Commenced

LSNE Agreement

Nashville Lease Expansion Premises

Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

The following table provides information regarding our debt:


	September 30,		December 31,
(in thousands)	2022		2021
Convertible senior notes (the “2027 Notes”)	$	287,500	$	287,500
Less: Unamortized debt issuance costs	(5,909)		(6,865)
Carrying amount of the 2027 Notes	281,591		280,635

Notes payable	100,000		—
Less: Unamortized debt discount	(1,434)		—
Less: Unamortized debt issuance costs	(1,268)		—
Carrying amount of notes payable	97,298		—
Debt, non-current	$	378,889	$	280,635

Interest expense relating to our debt in the condensed consolidated statements of operations and comprehensive loss are summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Contractual interest expense	$	3,454	$	1,258	$	8,425	$	3,773
Amortization of debt issuance costs	441		313		1,190		935
Amortization of debt discount	98		—		183		—
Total interest expense	$	3,993	$	1,571	$	9,798	$	4,708

Notes Payable

In March 2022, we entered into a note purchase agreement with Athyrium Buffalo LP (“Athyrium”), as administrative agent and Purchaser, and Hint, Inc., as a guarantor (the “Note Purchase Agreement”), pursuant to which the Purchasers (as defined therein) agreed to purchase from us, and we agreed to issue to such Purchasers, notes payable by us (the “Notes”). On March 18, 2022, we issued to the Purchasers Notes in an aggregate principal amount for all such Notes of $100.0 million (the “First Tranche”). Subject to satisfaction of certain conditions set forth in the Note Purchase Agreement, including the FDA approval of DAXXIFY™, $100.0 million in additional Notes (the “Second Tranche”) remains available to us under the Note Purchase Agreement until September 18, 2023. In addition, there is an uncommitted tranche of additional Notes in an aggregate amount of up to $100.0 million (the “Third Tranche”) available until March 31, 2024 subject to the satisfaction of certain conditions set forth in the Note Purchase Agreement, including the achievement of greater than or equal to $50 million in trailing twelve months revenue for DAXXIFY™ preceding the date of the draw request for the Third Tranche, and approval by Athyrium Capital Management, LP.

Our obligations under the Note Purchase Agreement are secured by substantially all of our assets and the assets of our wholly owned domestic subsidiaries, including their respective intellectual property.

Initially, the Notes bear interest at an annual fixed interest rate equal to 8.50%. If the Third Tranche of Notes becomes committed, the Notes will then bear interest at an annual rate equal to the sum of (a) 7.0% and (b) Adjusted Three-Month LIBOR for such interest period (subject to a floor of 1.50% and a cap of 2.50%). We are required to make quarterly interest payments on the Notes, commencing on the last business day of the calendar month following the funding date thereof, and continuing until the last business day of each March, June, September and December through September 18, 2026 (the “Maturity Date”). The Maturity Date may be extended to March 18, 2028 if, as of September 18, 2026, less than $90 million principal amount of our existing 2027 Notes remain outstanding and with the consent of the Purchasers. Initially, all principal for each tranche is due and payable on the Maturity Date. Upon the occurrence of an Amortization Trigger (as defined in the Note Purchase Agreement), we are required to repay the principal of the Second Tranche and the Third Tranche in equal monthly installments beginning on the last day of the month in which the Amortization Trigger occurred and continuing through the Maturity Date. At our option, we may prepay the outstanding principal balance of all or any portion of the principal amount of the Notes, subject to a prepayment fee equal to (i) a make-whole amount if the prepayment occurs on or prior to the first anniversary of the Effective Date and (ii) 2.0% of the amount prepaid if the prepayment occurs after the first anniversary of the Effective Date but on or prior to the second anniversary of the Effective Date. Upon prepayment or repayment of all or any portion of the principal amount of the Notes (whether on the Maturity Date or otherwise), we are also required to pay an exit fee to the Purchasers.

The Note Purchase Agreement includes affirmative and negative covenants applicable to us, our current subsidiaries and any subsidiaries we create in the future. The affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage and satisfy certain requirements regarding deposit accounts. We must also (i) maintain at least $30.0 million of unrestricted cash and cash equivalents in accounts subject to a control agreement in favor of Athyrium at all times and (ii) upon the occurrence of certain specified events set forth in the Note Purchase Agreement, achieve at least $70.0 million of Consolidated Teoxane Distribution Net Product Sales (as defined in the Note Purchase Agreement) on a trailing twelve-months basis. The negative covenants include, among others, restrictions on our transferring collateral, incurring additional indebtedness, engaging in

mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and undergoing a change in control, in each case subject to certain exceptions.

If we do not comply with the affirmative and negative covenants, such non-compliance may be an event of default under the Note Purchase Agreement. The Note Purchase Agreement also includes events of default, the occurrence and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 2.0% and would provide Athyrium, as administrative agent, with the right to exercise remedies against us and the collateral, including foreclosure against our property securing the obligations under the Note Purchase Agreement, including our cash. These events of default include, among other things, our failure to pay principal or interest due under the Note Purchase Agreement, a breach of certain covenants under the Note Purchase Agreement, our insolvency, the occurrence of a circumstance which could have a material adverse effect and the occurrence of any default under certain other indebtedness.

Convertible Senior Notes

In February 2020, we issued $287.5 million aggregate principal amount of convertible senior notes that are due in 2027 (the “2027 Notes”) pursuant to an indenture, dated February 14, 2020, between us and U.S. Bank National Association, as trustee (the “Indenture”). The 2027 Notes are senior unsecured obligations and bear interest at a rate of 1.75% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2020. The 2027 Notes will mature on February 15, 2027, unless earlier converted, redeemed or repurchased. In connection with issuing the 2027 Notes, we received $278.3 million in net proceeds, after deducting the initial purchasers’ discount, commissions, and other issuance costs. A portion of the net proceeds from the 2027 Notes were used to purchase the capped call transactions described below and the remainder will be used to fund expenses associated with commercial launch activities for both the RHA® Collection of dermal fillers and DAXXIFY™, research and development, and other corporate activities.

The 2027 Notes may be converted at any time by the holders prior to the close of business on the business day immediately preceding November 15, 2026 only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2020 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the 2027 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call any or all of the 2027 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after November 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2027 Notes at any time, regardless of the foregoing circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

The conversion rate will initially be 30.8804 shares of our common stock per $1,000 principal amount of the 2027 Notes (equivalent to an initial conversion price of approximately $32.38 per share of our common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2027 Notes in connection with such a corporate event or notice of redemption, as the case may be.

Contractually, we may not redeem the 2027 Notes prior to February 20, 2024. We may redeem for cash all or any portion of the 2027 Notes, at our option, on or after February 20, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the

principal amount of the 2027 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2027 Notes.

If we undergo a fundamental change (as defined in the Indenture), holders may require us to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2027 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Capped Call Transactions

Concurrently with the 2027 Notes, we entered into capped call transactions with one of the initial purchasers and another financial institution (the “option counterparties”) and used $28.9 million of the net proceeds from the 2027 Notes to pay the cost of the capped call transactions. The capped call transactions are expected generally to reduce the potential dilutive effect upon conversion of the 2027 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a price cap of $48.88 of our common stock per share, which represents a premium of 100% over the last reported sale price of our common stock on February 10, 2020. The capped calls have an initial strike price of $32.38 per share, subject to certain adjustments, which corresponds to the conversion option strike price in the 2027 Notes. The capped call transactions cover, subject to anti-dilution adjustments, approximately 8.9 million shares of our common stock.

The capped call transactions are separate transactions that we entered into with the option counterparties and are not part of the terms of the 2027 Notes. As the capped call transactions meet certain accounting criteria, the premium paid of $28.9 million was recorded as a reduction in additional paid-in capital in the condensed consolidated balance sheets, and will not be remeasured to fair value as long as the accounting criteria continue to be met. As of September 30, 2022 and December 31, 2021, we had not purchased any shares under the capped call transactions.

Stockholders’ Equity and Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Stockholders’ Equity (Deficit) and Stock-Based Compensation

Stockholders’ Equity and Stock-Based Compensation

2014 Equity Incentive Plan (the “2014 EIP”)

On January 1, 2022, the number of shares of common stock reserved for issuance under the 2014 EIP increased by 2,863,362 shares. For the nine months ended September 30, 2022, 505,028 stock options, 42,413 restricted stock awards, and 2,912,530 restricted stock units, including 1,518,389 performance stock units, were granted under the 2014 EIP. As of September 30, 2022, 2,850,464 shares were available for issuance under the 2014 EIP.

2014 Inducement Plan (the “2014 IN”)

For the nine months ended September 30, 2022, no stock options or awards were granted under the 2014 IN. As of September 30, 2022, 739,103 shares were available for issuance under the 2014 IN.

HintMD Plan

For the nine months ended September 30, 2022, no stock options or awards were granted under the Hint, Inc. 2017 Equity Incentive Plan (the “HintMD Plan”). As of September 30, 2022, 74,920 shares were available for issuance under the HintMD Plan.

2014 Employee Stock Purchase Plan (the “2014 ESPP”)

On January 1, 2022, the number of shares of common stock reserved for issuance under the 2014 ESPP increased by 300,000 shares. As of September 30, 2022, 1,833,972 shares were available for issuance under the 2014 ESPP.

Net Loss per Share

Our basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, which includes the vested restricted stock awards. The diluted net loss per share is calculated by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, shares of common stock underlying the 2027 Notes at the initial conversion price, outstanding stock options, unvested restricted stock awards/units and performance stock awards/units, and shares of common stock expected to be purchased under 2014 ESPP are considered common stock equivalents, which were excluded from the computation of diluted net loss per share because including them would have been antidilutive.

Common stock equivalents that were excluded from the computation of diluted net loss per share are presented below:


	September 30,
	2022	2021
Convertible senior notes	8,878,938	8,878,938
Outstanding stock options	4,957,025	4,898,630
Unvested restricted stock awards and performance stock awards	2,339,999	3,951,037
Unvested restricted stock units and performance stock units	2,690,816	—
Shares of common stock expected to be purchased on December 31st under the 2014 ESPP	188,715	89,919

At-The-Market Offering

In November 2020, we entered into a sales agreement with Cowen and Company, LLC (“Cowen”) as sales agent (the “2020 ATM Agreement”). Under the 2020 ATM Agreement, we could offer and sell, from time to time, through Cowen, shares of our common stock having an aggregate offering price of up to $125.0 million. We were not obligated to sell any shares under the 2020 ATM Agreement. Subject to the terms and conditions of the 2020 ATM Agreement, Cowen was required to use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of The Nasdaq Global Market, to sell shares from time to time based upon our instructions, including any price, time or size limits specified by us. We paid Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimbursed legal fees and disbursements and provided Cowen with customary indemnification and contribution rights. The 2020 ATM Agreement was terminated on May 10, 2022. From January 1, 2022 through May 10, 2022, we sold 1.7 million shares of common stock under the 2020 ATM Agreement at a weighted average price of $18.71 per share resulting in net proceeds of $31.6 million after sales agent commissions and offering costs.

On May 10, 2022, we entered into a new sales agreement (the “2022 ATM Agreement”) with Cowen. Under the 2022 ATM Agreement, we may sell up to $150.0 million of our common stock. We are not obligated to sell any shares under the 2022 ATM Agreement. Subject to the terms and conditions of the 2022 ATM Agreement, Cowen will use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of The Nasdaq Global Market, to sell shares from time to time based upon our instructions, including any price, time or size limits specified by us. We pay Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Cowen with customary indemnification and contribution rights.

As of both September 30, 2022 and the filing date of this Report, no shares of common stock had been sold under the 2022 ATM Agreement.

Follow-On Public Offering

In September 2022, we completed a follow-on public offering, pursuant to which we issued 9.2 million shares of common stock at a public offering price of $25.00 per share, which included the exercise of the underwriters’ over-allotment

option to purchase 1.2 million additional shares of common stock, for net proceeds of $215.9 million, after underwriting discounts, commission and other offering expenses.

Stock-based compensation expense was allocated as follows:


(in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Selling, general and administrative	$	13,245	$	6,624	$	27,937	$	21,193
Research and development	4,742		3,914		13,676		11,320
Total stock-based compensation expense	$	17,987	$	10,538	$	41,613	$	32,513

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

The following table summarizes, for assets and liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy.


	September 30, 2022
(in thousands)	Fair Value		Level 1		Level 2		Level 3
Assets
U.S. treasury securities	$	134,586	$	134,586	$	—	$	—
Money market funds	43,883		43,883		—		—
U.S. government agency obligations	29,806		29,806		—		—
Commercial paper	92,616		—		92,616		—
Corporate bonds	60,356		—		60,356		—
Yankee debt securities	3,015		—		3,015		—
Total assets measured at fair value	$	364,262	$	208,275	$	155,987	$	—


	December 31, 2021
(in thousands)	Fair Value		Level 1		Level 2		Level 3
Assets
Money market funds	$	90,355	$	90,355	$	—	$	—
Commercial paper	87,964		—		87,964		—
Corporate bonds	26,484		—		26,484		—
Total assets measured at fair value	$	204,803	$	90,355	$	114,448	$	—

Liabilities
Derivative liability	$	3,020	$	—	$	—	$	3,020
Total liabilities measured at fair value	$	3,020	$	—	$	—	$	3,020

For Level 1 investments, we use quoted prices in active markets for identical assets to determine the fair value. For Level 2 investments, we use quoted prices for similar assets sourced from certain third-party pricing services. The third-party pricing services generally utilize industry standard valuation models for which all significant inputs are observable, either directly or indirectly, to estimate the price or fair value of the securities. The primary input generally includes reported trades of or quotes on the same or similar securities. We do not make additional judgments or assumptions made to the pricing data sourced from the third-party pricing services.

The following table summarizes the change in the fair value of our Level 3 financial instrument:


(in thousands)	Derivative Liability
Fair value as of December 31, 2021	$	3,020
Change in fair value	980
Derecognition of derivative liability	(4,000)
Fair value as of September 30, 2022	$	—

Our Level 3 financial instrument was a derivative liability related to a settlement agreement from 2012, pursuant to which we were obligated to pay $4.0 million upon achieving regulatory approval for DAXXIFY™ or DaxibotulinumtoxinA Topical. We determined that such payment was a derivative instrument that requires fair value accounting as a liability and periodic fair value remeasurement until derecognized. The fair value of the derivative liability was determined by estimating the timing and probability of the related regulatory approval and multiplying the payment amount by this probability percentage and a discount factor based primarily on the estimated timing of the payment and a credit risk adjustment. Generally, increases or decreases in these unobservable inputs would result in a directionally similar impact to the fair value measurement of this derivative instrument. The significant unobservable inputs used in the fair value measurement of the product approval payment derivative are the expected timing and probability of the payments at the valuation date and the credit risk adjustment.

In September 2022, the derivative liability was derecognized as a result of the FDA approval of DAXXIFY™. The liability is included within accruals and other current liabilities in the condensed consolidated balance sheets as of September 30, 2022.

The fair value of the 2027 Notes and the Notes payable (Note 8) was determined on the basis of market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy. We present the fair value of the 2027 Notes and the Notes payable for disclosure purposes only. As of September 30, 2022, and December 31, 2021 the fair value of the 2027 Notes was $300.5 million and $257.1 million, respectively. As of September 30, 2022 the fair value of the Notes payable was approximately the same as its unamortized carrying value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Teoxane Agreement In January 2020, we entered into an exclusive distribution agreement (the “Teoxane Agreement”) with Teoxane SA (“Teoxane”), as amended in September and November 2020, pursuant to which Teoxane granted us the exclusive right to import, market, promote, sell and distribute Teoxane’s line of Resilient Hyaluronic Acid® dermal fillers, which include: (i) RHA® 2, RHA® 3 and RHA® 4, which have been approved by the FDA for the correction of moderate to severe dynamic facial wrinkles and folds (the “RHA® Collection”) and RHA® Redensity, which had been approved for the treatment of moderate to severe dynamic perioral rhytids (lip lines) (collectively, the “RHA® Collection of dermal fillers”), and (ii) future hyaluronic acid filler advancements and products by Teoxane (the “RHA® Pipeline Products”) in the U.S. and U.S. territories and possessions, in exchange for 2,500,000 shares of our common stock and certain other commitments by us. The Teoxane Agreement is effective for a term of ten years from product launch in September 2020 and may be extended for a two-year period upon the mutual agreement of the parties. We are required to meet certain minimum purchase obligations during each year of the term and are required to meet certain minimum expenditure requirements in connection with commercialization efforts unless prevented by certain conditions such as manufacturing delays. Either party may terminate the Teoxane Agreement in the event of the insolvency of, or a material breach by, the other party, including certain specified breaches that include the right for Teoxane to terminate the Teoxane Agreement for our failure to meet the minimum purchase requirements or commercialization expenditure during specified periods, or for our breach of the exclusivity obligations under the Teoxane Agreement. Other Contingencies As of September 30, 2022, we are obligated to pay Botulinum Toxin Research Associates, Inc. (“BTRX”) up to a remaining $15.5 million upon the satisfaction of certain milestones relating to our product revenue, intellectual property, and clinical and regulatory events. Indemnification We have standard indemnification agreements in the ordinary course of business. Under these indemnification agreements, we indemnify, hold harmless, and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to our technology. The term of these indemnification agreements is generally perpetual after the execution of the agreements. The maximum potential amount of future payments we are obligated to pay under other indemnification agreements is not determinable because it involves claims for indemnification that may be made against us in the future but have not been made. We have not yet incurred material costs to defend lawsuits or settle claims related to indemnification agreements. We have indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. For the nine months ended September 30, 2022 and 2021, no amounts associated with the indemnification agreements have been recorded. Litigation In October 2021, Allergan, Inc. and Allergan Pharmaceuticals Ireland (collectively, “Allergan”) filed a complaint against us and ABPS, one of our manufacturing sources of DAXXIFY™, in the U.S. District Court for the District of Delaware, alleging infringement of the following patents assigned and/or licensed to Allergan, U.S. Patent Nos. 11,033,625; 7,354,740; 8,409,828; 11,124,786; and 7,332,567. Allergan claims that our formulation for DAXXIFY™ and our and ABPS’s manufacturing process used to produce DAXXIFY™ infringes its patents. Allergan also asserted a patent with claims related to a substrate for use in a botulinum toxin detection assay. We dispute Allergan’s claims and intend to defend the matter vigorously. On November 3, 2021, we filed a motion to dismiss. On November 24, 2021, Allergan filed an amended complaint against us and ABPS, alleging infringement of an additional patent assigned and/or licensed to Allergan, U.S. Patent No. 11,147,878. On December 17, 2021, we filed a second motion to dismiss, and on August 19, 2022, the court denied our motion to dismiss. On September 2, 2022, we filed an answer and counterclaim to Allergan’s amended complaint. A jury trial is scheduled to begin on December 2, 2024. On December 10, 2021, a putative securities class action complaint was filed against the Company and certain of its officers on behalf of a class of stockholders who acquired the Company’s securities from November 25, 2019 to October 11, 2021 in the U.S. District Court for the Northern District of California. The complaint alleges that the Company and certain of its officers violated Sections 10(b) and 20(a) of the Exchange Act by making false or misleading statements regarding the manufacturing of DAXXIFY™ and the timing and likelihood of regulatory approval and seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. The Court appointed a lead plaintiff and lead counsel on September 7, 2022. The lead plaintiff filed an amended complaint on November 7, 2022. We dispute these claims and intend to defend the matter vigorously. These lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the lawsuits is necessarily uncertain. We could be forced to expend significant resources in the defense of either lawsuit, and we may not prevail. In addition, we may incur substantial legal fees and costs in connection with each lawsuit. We record a provision for a liability when we believe that is both probable that a liability has incurred, and the amount can be reasonably estimated. As of both September 30, 2022 and December 31, 2021, no such provision for liabilities related to the above litigation were recorded on the condensed consolidated balance sheets.

Segment Information	9 Months Ended
Segment Information	Sep. 30, 2022
Segment Reporting [Abstract]
Segment Information	Segment Information Reportable Segments We report segment information based on the management approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of our reportable segments. We have two reportable segments: the Product Segment and the Service Segment. Each reportable segment represents a component, or an operating segment, for which separate financial information is available that is utilized on a regular basis by our CODM in determining resource allocations and performance evaluation. We also considered whether the identified operating segments should be further aggregated based on factors including economic characteristics, the nature of products and services, production processes, customer base, distribution methods, and regulatory environment; however, no such aggregation was made due to dissimilarity of the operating segments. Product Segment