Q4 2023 Revance Therapeutics Inc Earnings Call
Participants
Jessica Serra; Head of Investor Relations and ESG; Revance Therapeutics Inc
Mark Foley; President, CEO, Founder; Revance Therapeutics Inc
Toby Schilke; Chief Financial Officer; Revance Therapeutics Inc
David Amsellem; Analyst; Piper Sandler & Co.
Stacy Ku; Analyst; TD Cowen
Ilana Lalo; Analyst; Guggenheim
Terence Flynn; Analyst; Morgan Stanley
Navann Dietschi; Analyst; BNP Paribas Exane
Serge Belanger; Analyst; Needham & Company LLC
Presentation
Operator
Welcome to the Revance Therapeutics Fourth Quarter and Full Year 2023 financial results and corporate update conference call. (Operator Instructions) As a reminder, this call is being recorded on Wednesday, February 28, 2024. I would now like to turn the conference call over to Jessica Serra, Head of Investor Relations, Corporate Communications and ESG for events. Please go ahead.
Jessica Serra
Thank you, operator. Joining us on the call today from Revance, our Chief Executive Officer, Mark Foley, and Chief Financial Officer, Toby Schilke. During this call, management will make forward-looking statements, including statements related to the impact of our pricing and strategy OnDeck's focus on adoption expectations and timing related to product adoption and reorders of pop product pipeline, consumer needs, preferences and behavior, the benefits and value to US practices and consumers of our products, including the efficacy, duration and safety of our products, 2024 guidance, cash flow breakeven, positive adjusted EBITDA, future capital expenditures, funding our business and capital allocation plans.
Our strategic priorities, our anticipated success of blockbuster and growth potential for market opportunity and expectations, provider partnerships, the wind down of Opal, our strategy plan operations, international expansion, strategic partnerships and commercialization plans and timing. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements.
As a result of these risks and uncertainties, factors that could cause these results to be different from these statements include factors the company describes in the section called Risk Factors in our annual report on Form 10-K to be filed with the SEC today, February 28, 2024. Revance undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events or changes in its expectations. Also on today's call, we will present both GAAP and non-GAAP financial measures reconciliation of non-GAAP to GAAP measures is included in our earnings release.
With that, I will turn the call over to Mark Foley, Chief Executive Officer of Revance. Mark?
Mark Foley
Thank you, Jessica. Good afternoon, everyone, and thank you for joining our fourth quarter and full year 2023 financial results conference call. I'll first cover our overall performance in our aesthetics and therapeutics businesses before turning the call over to Toby to review our financial results and 2024 guidance 2023 was an important year for readouts. We realized several pivotal milestones, including the launch of diversifying the aesthetics and the FDA approval of DR5 for cervical dystonia. In addition, to achieving record product revenue of $213 million, up 80% year over year.
From a balance sheet perspective, we ended the year in a strong financial position with $254 million in cash, cash equivalents and short-term investments. Combined with our commercial progress to date, we believe we are well positioned to deliver on our strategic priorities for 2024, which I will cover later in the call.
Turning to diversify for our aesthetics business. We generated total sales of $95 million in our first five quarters of launch, exceeding the combined sales of the last three neuromodulators to enter the market in the same launch time frame.
We also gained important real-world feedback from the early stages of our docs, if I launch, which informed our updated pricing and provider engagement strategy, better positioning us for broader adoption and long-term success. As a reminder, we revised DAXXIFY pricing in September of last year to be more competitive and to facilitate greater trial and adoption. Since adapting our strategy, we began to see the desired impact with regards to usage, reorder rates and customer perception with that momentum continuing into Q1.
From a sales volume perspective, Q4 vials sold were up 22% compared to Q3, and importantly, more than two thirds of Q4 revenue came from existing accounts. Based on our current focus on existing customers. We believe this reflected deeper product adoption. We ended the year with over 3,000 DAXXIFY accounts, which is less than 10% of the total number of US aesthetic accounts and less than one-half of our existing account base, underscoring our significant runway for growth since the rollout of our new pricing and provider engagement strategy.
We have focused our efforts on existing diversified customers since these accounts have already been trained, have experienced with the product and in most cases, our HME customers and from a reputational and foundational perspective, we believe it's important to gain their support. Previously, we indicated that we expect this reengagement plan to take approximately two quarters before turning our focus to new account activation in the beginning of Q2 beyond pricing, we consistently hear from customers that DR5 is a great product and offers a compelling value proposition because of its unique peptide formulation, fast onset, long duration and ability to enhance the skin's appearance. To that end, we recently introduced new brand messaging for DAXXIFY, which highlights the product's full range of benefits and ability to deliver an optimal overall a static.
Look, the new messaging, along with expanded sales tools and materials, was shared with our sales team at our national sales meeting in January and has been very well received based on feedback and in support of our new pricing strategy, we recently removed our no advertised price policy which was implemented in introductory phase of our product launches.
However, as we move to broaden our share and brand awareness, it is important that we empower practices to market and promote the Revance product portfolio during the fourth quarter and into Q1. We also expanded and augmented our marketing tools, marketing materials, sales force, training and customer education programs.
We have and will continue to increase our visibility with customers and KOLs, the advisory boards, congresses, podium presence, media events and thought leadership. Further, in February, we executed one of several planned promotional programs, a patient coupon program, which has been very well received and aligns with our goal of driving greater practice and consumer experience with DR5.
Turning to our filler business, the RHA Collection continues to be vital to our aesthetics franchise and foundational to the long term growth diversified three years into launch. The RHA Collection is still the fastest growing HA filler in the US sitting at about 10% market share, which was largely achieved independent of a neuromodulator.
We believe our HA success can be attributed to not only our strong execution, but more importantly, its leading innovation. Our HAE is designed to more closely resemble the natural hierarchy hyaluronic acid found in the skin, which we believe distinguishes the collection from other competitive offerings. Further the collections range of utility continues to expand with new SKUs and indications, including our HA were density for lift lines RJ4 for cannula use.
And more recently, our HA3 for lip augmentation in lymphomas, Ilypsa, the most frequently treated area for dermal fillers and the recently approved label expansion provides us with new opportunities to train on RHA's leading innovation and injection techniques. We look forward to launching the new lip indication in Q2
In 2023 We were pleased to deliver 20% year over year. Our HA revenue growth despite softness in the US filler market. And while we launched diversify and work through our strategy changes as we move into 2024, we look forward to continuing to drive healthy growth across both that Safi and the RHA product line through a combination of new account activation and deeper penetration while also beginning to unlock portfolio synergies across diversify and RHA we ended the year with over 7,000 aesthetic accounts, up from 5,001 year ago.
Now let me turn to our compelling opportunity in therapeutics with the approval of our cervical dystonia indication due to DR5, unique and differentiated profile. We look forward to addressing the unmet needs of patients, physicians and payers in this category based on a published study in the Journal of Neurology, 88% of CD patients experienced symptom reemergence between injections with symptom with symptom recurrence happening as early as week eight because patients can't get reinjected until 12 weeks due to label and reimbursement restrictions, fiscally CD patients with significant treatment gaps when considering both the delayed onset of action and early wear off.
Based on our clinical trial data and early preview experience, we believe that docs, if I have the potential to provide patients with better symptom control, along with the compelling safety profile as toxins are the 12th most costly medical benefit drug category payers are also motivate motivated to find alternatives that offer both clinical value and that can lower the cost of therapy based on DR5 clinical performance by oil price and the dosing used in our clinical trial, there's an opportunity for meaningful savings to payers, which we believe is why we've seen such strong commercial coverage at such an early stage in our launch.
Taken altogether, we believe Doxis strong efficacy, long duration and favorable safety profile, coupled with its attractive pricing have the potential to disrupt the current CD. treatment landscape, which has remained largely unchanged for 30 years following FDA approval in August 2023, we subsequently launched our CD preview program to leading clinicians in order to optimize treatment outcomes for patients and to assure ensure smooth practice innovate integration.
To date, we have treated more than 300 patients across approximately 30 practices, which is in line with our plan as the majority of CD. patients experienced symptom breakthrough most patients treated to date in the previous program.
Are those who are uncontrolled on their current toxin and switching. These patients to diversify physicians have reported that they're using a wide range of doses in their effort to optimize treatment outcome. In addition, diversified safety profile continues to be encouraging even in the presence of escalating doses. To date, approximately one-third of patients have completed their first treatment cycle and are now in their second treatment cycle.
As a reminder, with a new toxin, physicians tend to start patients at the lower end of the dosing range before titrating them up over subsequent treatment cycles. In order to find the optimal balance between symptom control and safety, despite being early in the dose optimization journey. When surveyed 94% of previous physicians who have been in the program since its inception indicated that they perceived diversified to last longer than other toxins based on their first treatment cycle.
In summary, we've been very encouraged to see real-world clinical results, including safety, efficacy and duration in line with those seen in our Aspen clinical program, we remain on track to initiate a targeted commercial launch midyear, having received our permanent J-code in early January.
Importantly, we've also made significant process progress on the payer front already securing 25 of the top 30 plans covering over 50% of commercial lives. This impressive achievement reflects not only the team's ability to execute, but also diversifies differentiated clinical profile and attractive economic profile for payers. Also, we recently operationalized our patient reimbursement support services to minimize potential hurdles to adoption. In addition, we have launched our patient affordability program to ensure out-of-pocket costs do not impede access to therapy.
On the commercial infrastructure side, our Therapeutics team will include about 40 people across sales, medical affairs, market access and reimbursement. We believe we have the appropriate resources to target the concentrated CT physician population for 70% of patients are treated by the top 20% of physicians or about 1,000 injectors as announced earlier today, the therapeutics commercial organization will be led by Dr. David Hollander, our Chief Medical Officer, who is taken on the expanded role of Global Therapeutics franchise lead reporting directly to me, I'm confident that David's deep experience at all stages of the product lifecycle in addition to building strong teams will add significant value to our therapeutics franchise. As preview continues to advance, we look forward to presenting two posters and abstracts on our ASPEN program at the American Academy of Neurology in April.
With that, I'll turn the call over to Toby to cover our fourth quarter and full year financials and our 2024 financial guidance.
Toby Schilke
Thank you, Mark. The press release and the 10-K we issued today details our financial results in full, so I will only go over the highlights on this call.
Total revenue for the fourth quarter and full year 2023 were $69.8 million and $234 million, up 40% and 77%, respectively, from the same periods last year. Total revenue for the fourth quarter included $58.5 million of product revenue, $2.3 million of service revenue and $9 million of collaboration revenue on the product side for diversify.
We delivered $24 million in sales in Q4 and $84 million in sales in our first full year of launch in 2023. For the RHA Collection. Fourth Quarter and Full Year 2023 revenue were $34.5 million and $128.6 million. Sales were up 20% for the full year, driven by deeper and broader account penetration. Quarterly sales were down 1% year over year, primarily due to higher than normal RHA sales recorded in Q4 of 2022. This dynamic resulted from both the introduction of the RHA route density skew and the launch of DAXXIFY. If I were early access to densify was prioritized among accounts that have ordered our RHA.
Regarding OPUL, our services business substantially all payment processing was stopped as of January 31st, 2024, and we are on track to complete the wind-down of the business by the end of Q1, providing cost savings of approximately $20 million.
This year, we recognized $9 million of collaboration revenue in Q4 related to our biosimilar to BOTOX program with VHRS. The revenue is reflective of the progress made in our collaboration effort. Note that since the inception of the program we have received a total of $60 million from upfront and milestone payments, which have been shown as deferred revenue on our balance sheet. The revenue was recognized primarily from the deferred revenue balance.
Turning to OpEx, we are pleased to see our 2023 GAAP and non-GAAP operating expenses of $550.8 million and $319 million come in on the low end of our previously announced guidance, underscoring our continued efforts of disciplined capital allocation and cost controls. Further, we continue to see operating leverage within our business.
Full year 2023 non-GAAP operating expenses increased 19% from 2022, while total product revenue increased by 80% during the same period on the balance sheet side, our current cash position, operating plan and anticipated revenues provide us with multiple levers to appropriately fund our commercial growth while maintaining our path to breakeven positive adjusted EBITDA in 2025.
Finally, Revance's shares of common stock outstanding as of February 16th, 2024 are approximately 88.2 million, with 97.7 million fully diluted shares, excluding the impact of convertible debt.
Before I turn the call back to Mark, I'd like to review our 2024 revenue and OpEx guidance in greater detail. We recently provided our product revenue guidance, which includes sales of densify and our HA of at least $280 million for 2020 for our guidance, assumes continued market share growth for the RHA Collection and diversify statics and modest revenue contribution from the launch of DAXXIFY for cervical dystonia. Further, our guidance takes into consideration normal seasonality. As a reminder, the US facial injectables market experienced its traditional seasonality where Q1 and Q3 are typically slower periods during the year compared to Q2 and Q4.
Turning to our OpEx guidance, we expect our 2024 GAAP OpEx to be between $460 million to $490 million, and our non-GAAP OpEx to be between $290 million to $310 million. And you will note that we are aiming to deliver increased year-over-year product revenue growth, while at the same time decreasing our operating expense levels.
The midpoint of our 2024 non-GAAP operating expense guidance represents a 6% reduction from last year, driven primarily by the divestiture of our OPUS payments business. In addition to organizational streamlining and operational efficiencies. Further, we expect our non-GAAP SG&A expenses to be between $240 million to $255 million.
And with that, I'll turn the call back over to Mark.
Mark Foley
Thank you, Toby. Before we conclude, I'd like to review our strategic priorities for 2024. First and foremost, we will focus on delivering at least 32% growth on the top line, while effectively managing spend to reach positive adjusted EBITDA in 2025. To reach this goal, we plan to execute on our commercial objectives for diversifying our RHA launch Taxus five for CD midyear and maintain our disciplined capital allocation while continuing to drive operational efficiencies.
The proof points of our commercial strategy continue to provide us confidence in the trajectory of DAXXIFY and our RHA for densify in particular, the ongoing positive trends in adoption and improving customer sentiment reinforces our belief in our blockbuster potential in the US the aesthetics market.
Further, we are on a path to realizing our future growth opportunities and therapeutics, the international expansion of densify and strategic partnerships with frozen and Beatrice combined, these represent access to a $5 billion market opportunity outside of the $4.2 billion US facial injectables market.
With that, I will now open the call up for questions. Operator?
Question and Answer Session
Operator
Thank you. (Operator Instructions)
David Amsellem, Piper Sandler.
David Amsellem
thanks. Just have a couple. So first wanted to drill down more on the top line guidance and I guess I'll just ask it plainly, how realistic do you think the implied assumptions regarding the DAXXIFY for 24?
There's clearly expectation here that there's going to be aggressive on expansion of the sales footprint. I just wanted to get your thoughts on what gives you that level of confidence? Is it a greater our footprint among a significantly greater footprint among newer accounts. Is it deeper penetration within existing accounts? How are you thinking about that mix and just your overall level of confidence, that's number one and then secondly, on the fillers and RHA is more of a long-term question, but how are you thinking about competitive dynamics and with Evolus looking to enter the market less about this year and more about the long-term dynamics in the context of a potentially more crowded space.
Mark Foley
Thank you. Thanks, David. This is Mark. On the top line growth. We obviously feel very good about the $280 million guidance guidance that we put out there for top line. As we stated on our JPMorgan pre-announcement, that we'd expect a little more of that come from our HA and a little bit less to come from diversify.
And so we feel very good. I mean, if you look at where we are in our launch last year, the back half where we made some strategy changes in the pivot, we didn't see the normal launch trajectory because we were doubling back to those existing accounts to cement that relationship and now trying to address kind of what their concerns and issues were as we saw going into Q4, we were getting really good feedback from accounts that the pricing change, removed an important barrier to adoption.
And with the way that we've leaned in and are prioritizing some of the other engagement strategies, we feel very good about the way that that is going. We have stated that we would expect to see normal seasonality in this business, but our growth will come from a combination of new account adds along with ongoing reorders.
And as we noted in Q4, more than two thirds of our revenue came from reordering accounts, which I think points to the stickiness of the product. And those accounts where we're able to secure. So we feel very good about where we are and again, particularly with how early we are in the diversified side.
I would also note that we mentioned that we're in about 3,000 active accounts at the end of the year, and we have an account base of 7,000 accounts. So even before we go outside of our existing account base. We have a number of accounts that we've got relationships with that we can run and there will be opportunity for bundling and cross-selling to as we move forward on the filler dynamic side, the nice thing about the taxane partnership is that we were able to bring into market the sort of the latest innovation and filler technology but one that has years and years of experience.
And so we feel very good about if you look at how our HA interaction has performed internationally in a very competitive market, how they've been able to continue to take share and to grow it. And with our expanded portfolio of different RHA filler lines in the expanded indications, we feel very good about how we're positioned in the market.
And also given where we are in our journey, we have plenty of opportunity to continue to grow our share and we've been the fastest growing share taker over the last three years, and we feel very good about the technology and where we're positioned in the market.
David Amsellem
Helpful. Thank you.
Operator
Stacy Ku, TD Cowen.
Stacy Ku
Thanks so much for taking your questions. We did have a few. So just first and partly for Q2. A little bit of a follow-up on the last question. Give a sense as you broaden out what kind of clinicians or accounts or hoping to target are they going to be the RESG existing accounts?
Just characterize your plan to put more And curious if you expect the sales force will have the ability to go beyond 500 accounts roughly per quarter. So curious, you're targeting the same monitoring that you've kind of focused on recently and I have a follow-up.
Mark Foley
Sure, Stacy. So on the number of accounts as we kind of look at Q2 and where we're going to go, we frankly give a lot of latitude to the sales managers and the sales reps. Obviously, the market continues to grow and expand. And there's a wide range of different providers. Obviously, those that we have a relationship or a natural starting point for us because we know the accounts and they know us. And so we would expect that that would be the initial priority.
But having said that, we also know from the RHA launch, there were a number of accounts that we're certainly intrigued by diversify, but for whatever reason weren't willing to engage with our HA at the time. And we think that that's going to be a great entry point for us for some of these accounts that are excited to offer, diversify and the innovation that is that it offers in the market. So I think it will be it will be a mix. And I think you'll see some variability across geographies.
As you know, we started more with kind of a prestige strategy that was really tailored and targeted towards the top third of accounts. But I think now that we have adjusted our pricing to be more aligned, if anything, it opens up a broader aperture and a broader account opportunity for us. So it's really about qualifying those accounts that are willing to lean in with us that see the value that are going to promote and support the product.
And again, given sort of the number of accounts that we still have to go. We feel good about it in terms of the sales force and the training and the number of accounts again, I think that if you look back, we never had a target, for example, with the RHA filler line to open a 500 new accounts per quarter. It just turned out that was sort of what the field force could digest between continuing to support existing accounts and trying to go deeper along with opening up new accounts. And then obviously, we believe very strongly in medical education and training.
And given the profile of our products and sort of the innovative innovation that underlines them, we believe that the best way to for people to get the full value is through training and education. So that will be an important part of it. And so it's, I think, really hard right now to say for sure exactly what that account ramps going to look like partly because we have existing relationships too, that we're going to go into. But when we've done the roll up and put together our plan, we feel very good about the guidance that we've put out there.
Stacy Ku
Understood. And then just briefly on kind of the ongoing relationship repair with these accounts, are you willing to discuss in more detail what's working where you see these accounts or increasing orders versus maybe that have roughly one-third or so of accounts where there's a little bit more reticent to just trying to understand where we are in foreseeing any early signals in kind of the repair overhaul? Thank you.
Mark Foley
Yeah, I mean, we like the signals and the signs that we're seeing and we've talked about the percentage of revenue in Q4 that came from reordering accounts, which we think is a good indicator for us. People leaning in seeing the value in the strategy, appreciating the adjustment in price and frankly, appreciating that we're listening and making actionable changes to it.
And so it's early, we'll continue to provide metrics and data that we think are representative of trends, not just points in time. And so as we move forward, we'll continue to share things that we think are helpful. But again, reflects what we're seeing. But we we're encouraged by what we continue to see as we've moved into the new year.
Stacy Ku
It's very helpful. Thank you
Operator
Balaji Prasad, Barclays.
Your line is now open if you'd like to proceed with your question. I'm afraid we get no audio from the largest line, so they will have to move onto Chris Shibutani, Goldman Sachs.
Hi, good afternoon, Krishna on for Chris Shibutani. Thank you for taking our question. I was wondering if you could help us frame the discussion around cervical dystonia, how should we think about the positioning of the product in regards to payers and the impact of the permanent J-Code on the ramp of revenue generation and the adoption curve? Thank you.
Mark Foley
Yes, sure on the cervical dystonia market in the U.S., it's about a $340 million market. Most of these patients are existing patients. So a lot of the patients that we have seen in our previous program and that we expect to convert over to Dax.
If I were going to be switch patients, what's interesting for cervical dystonia? There's no cure. And so it's really a management of the symptoms and toxins are really the frontline therapy to manage it.
Interestingly, as we pointed out in our prepared remarks, is that over 80% of these patients see symptom reemergence before they can get reinjected prior to week 12. And so given the data that we generated in our ASPEN clinical program, our ability to potentially give them many more symptom-free days, both from a an early onset of action, along with a good duration profile, has been incredibly well received by both clinicians and payers.
And so we're trying to go forward in a measured way because within the neurology community, they tend to be conservative. They're going to start low on the dosing and they're going to dose them up over time. But as we mentioned in our prepared remarks that when asked when asking our preview physicians, what they thought of the duration profile of their perception of duration profile of diversify 94% of them felt that it was longer lasting until we have an opportunity to be the first really truly novel therapy in CD. in over 30 years.
On the payer side, what makes it interesting for payers is that the based on the dosing ranges that we saw in our cervical dystonia, cervical dystonia, clinical program is that we are seeing more one-to-one dosing with other toxins. And based on the current vial price that we have when you do one to one dosing, there's a material discount for these payers.
And so the payers are looking at this saying, wow, this is a product that can deliver results that are similar to or better than conventional toxins and there's that there's that type of price break. We love it, which is why we think we've seen such a robust adoption in the commercial lives covered. So we're already over 50% coverage on commercial lives before we even get started into the launch side of it, we do want to be measured because we know as we move into the full launch what's going to regulate.
This is the way that physicians treat these patients, which is they will start low. These are switch patients. They'll monitor them through their first 12 week cycle and then if the symptoms are managed, they won't go up any further. If not, we'll continue to up the dose. And so we just want to give time for that learning process to take place over multiple cycles. But we think that this is a really an encouraging gateway for us into the broader therapeutics market. And we really like where we're positioned Thank you.
That was really helpful.
Operator
Annabel Samimy, Stifel.
This is Jack on for Annabel. Thanks for taking our question. So could you provide a little bit more color on how you're changing your communications with physicians so that they're fully aware of your new price changes, have you only really been circling back to the accounts that you have an existing relationship with or have you kind of broaden that message such that new accounts can kind of gain some increase brand awareness?
Mark Foley
Yeah, so on the pricing change, given our focus on existing accounts, we really allow that to happen much more through the rep side of it because again, our primary goal in these first two quarters were to solidify the foundation with many of these accounts that are existing customers on the RHA side went through training know how to inject the product, but you had feedback for us on how we could improve things.
And in some cases, they've got product on the shelf that needs to be worked through before they turn into a reordering account. And so rather than blast out the pricing to everybody, we thought it was best to allow those reps to go back into reengage to explain the rationale and work with these accounts on the different pull through as we start to move forward and go to more of a new account activation in Q2, then we'll be much more forward leaning on the pricing.
And that's not to say that we are open about the pricing. But given the strategy, it's been more driven at the rep level and their ability to get back into these accounts and reengage. And then as we go forward, we'll be able to more broadly, I disseminate that information.
Great. Thanks.
Operator
[Ilana Lalo, Guggenheim].
Ilana Lalo
Thanks for taking the question. Just two quick ones. First on regarding the patient coupon program. I'm just wondering if you can provide any color on kind of what that looks like and any metrics that you can share so far on how that has done, Gerben increased patient interest and DAXXIFY and then with the removal of the no advertised price policy and again, any impact you're seeing from that yet, and any metrics that you can share from that angle?
Mark Foley
Sure. Well, it's probably premature to say or any met TierOne metrics. I think it's something we can share in more detail on our Q1 earnings call, but the patient coupon is basically a $75 off for the consumer that was redeemable through the practice. And so with purchases, the practice received a number of those coupons that they can use. And all this is designed to stimulate trial use and experience with our belief that more injectors get comfortable with the product and the more that patients experience, the look that there's going to be a bias and a desire to continue to get retreated with diversify.
And as we've said in the past, we're going to continue to pilot a number of these different initiatives. We've had different types of programs like this in the past, whether it's snow for people to qualify for one of our grew trainings or different influencer events or other types of programs.
And so these are fairly common in the industry and we're going to pilot a number of these, but we've been very pleased to see the receptivity of this, both at the account level and on the patient level, and it's having the desired effect of generating more trial usage and experience in terms of the removal of NAP, our new advertised pricing policy has also been very well received, obviously in a B to B B to C business.
It's important that practices are able to drive awareness in a way that's linked to their practice. And so by removing this, this allows practices to more and more actively promote sort of the range of Revance product lines across our HA and diversify. And we got a lot of kudos from accounts who sort of felt like these. I want to do a better job of promoting this I'm excited about the product, and I'd like to be able to tell more customers about it, if I'm limited in some cases to in-office advertising only. Then I feel I'm missing out on opportunities to drive more awareness. And so again, it aligns with the pricing change that we've made, and we've been encouraged by what we're seeing so far there.
Ilana Lalo
Great. Thank you so much.
Mark Foley
Thank you.
Operator
Tim Lugo, William Blair.
This is John on for Tim. Thanks so much for taking our question. Just one from us. So I was just wondering if the team could provide commentary on the comfort level with the current debt structure.
Mark Foley
Yes. Toby, do you want to hit that on a comfort level on the current debt structure?
Toby Schilke
Yes, sorry about that. I didn't hear the question. Yes, I think when you take a look at what we've been trying to achieve over time and the operating leverage that we're generating on through 2023 decisions, we've taken to streamline our business with the reduction of Opel on and kind of moving towards a profitability that we feel is in sight with the guidance we've given both from a top line perspective and the OpEx perspective of having EBITDA positive in 2025.
I feel like that really unlocks a lot of options on what's sort of our capital stack. Clearly, we'll always take prudent measures to finance the business and manage our maturities. But we feel like the first thing to do is prove out the business model continue the track record of success that we've had growing, diversify our HA with a cost structure that we've outlined here, and that will unlock continued operator opportunities on through either organic or sort of other financing alternatives.
Very helpful. Thanks.
Operator
Terence Flynn, Morgan Stanley.
Terence Flynn
Great. Thanks for taking the question. Maybe a two part from me on Dex. If I I know earlier this year you had talked about one of the things you guys were working through. Was the trying to help practices with some of the prior inventory at a higher cost. And so just maybe talk us through where you are in that process.
And then the second question is, I think during your prior remarks, Mark, you mentioned bundling and I think that's the first time we've heard about the potential to bundle DAXXIFY and RHA. So just wondering, is that something that's currently out there in the marketplace or is that something that's being contemplated? And then how would that how would that work, I guess, effectively? And how do you think about the impact of that on this year's revenues? Thank you.
Mark Foley
Sure. So first, in terms of working with those customers and some that had made perhaps product on the shelf at higher cost unit up wagon, we focused these two quarters on going back to those existing accounts, I would say were we're a good way through that majority of the way through that, partly because the reps were incentivized to go and engage with those accounts, figure out how we can get them back on track and work with them to develop a strategy to move some of the barriers and obstacles to getting back on board.
So I feel we've made a really good, really good progress there. And that's why I think when we go into Q2, hopefully we've sort of worked our way through those accounts that were existing users, those that are going to get on board with us. We've had an opportunity to reengage them and then we can start moving forward sort of with a clean slate on the bundling side of it, both with our RHA and with Axovant, we wanted those products to stand on their own.
It doesn't help to trying to put together bundling programs until people are sort of fully bought into both individual products. We don't want the incentive for them to drive product is just because of discounting. We want them to buy into the products because they believe in the value and they see the value. And then what we can do is look to how do we create additional incentives for these accounts to go deeper and broader with us once they're embedded.
So to your question, we really haven't done anything yet on the bundling side, but that is something that we do plan to kick off as we move throughout the year, where there will be additional incentives for practices, whether it's different benefits that they get or pricing when we link the two together and they're willing to give us greater share of their business in return for some additional value.
And so we just want to make sure that we're establishing the products based on their own merit first and then can find ways to unlock that. And we do think that that will be a source of future opportunity for us as we take those accounts, that might be our HSA accounts only or densify accounts only and figure out how we can create mutual align with those accounts to grow our share.
Terence Flynn
Thank you.
Operator
Navann Ty, BNP Paribas.
Navann Dietschi
Hi, everyone. Thanks for taking my question and a follow up on to the previous one. Can Could you clarify on what is left to do and on the account reengagement and maybe you can touch base on the priorities and if we would see any strategy tweaks with the new Chief Commercial Officer and the Global Therapeutics franchise lead. Thank you.
Mark Foley
Sure. So I think you're asking kind of where we are in kind of the re-engagement strategy. And so that's something we said is going to be a priority up and through the end of Q1 before we kick off sort of more traditional launch dynamics where new account activation will be an important part, not that it is it today, but it will take much more of a prominent role going forward. And so we're WERE given where we are now at the end of February, we've made really good progress through that.
And you'll see us again move to a more normal launch cadence as we get into Q2 on the leadership side, you know, as we previously announced, we promoted that Erica Jordan into the Chief Commercial Officer role over therapeutics America joined the organization in sort of the spring of last year and was doing a lot of strategic workforce on the commercial side.
So she has spent a lot of time with the organization understand its strategic priorities, work streams and stuff. And so we feel very fortunate to have her leading our aesthetic efforts and she's doing a great job and has really been intimately involved with a lot of the streamlining efforts that we have made and we think her background is uniquely suited to help us get to where we need to go on the aesthetic side, on the therapeutic side, as we announced, we added the additional responsibility to David, Dr. David Holland, our Chief Medical Officer of Global Franchise Head for it therapeutics group.
And I think given his background and experience being an MD, particularly with that within the neurology community, we think that not only does he have the gravitas from a leadership and skill set, but we think being an MD and with our targeted launch is going to really help ensure that we position thing the right way that we're understanding the subtleties around how physicians are using it and how best to position ourselves for the future growth.
And so David's always been close to the program, but more on the medical side and now in sort of the leadership side, we feel really good to have him in that role because we said it's going to be a targeted launch. We'll start with about 40 commercial folks across sales reimbursement, market access and medical affairs. And we've got a lot of the leaders already in place in that functional area that David's already had a chance to work with. And so we feel that we've got the right infrastructure in place today hit on our plan.
Navann Dietschi
And this is helpful. Thank you.
Mark Foley
Thank you.
Operator
Serge Belanger, Needham & Company.
Serge Belanger
Hi, good afternoon. A couple of questions on the upcoming daxi launch in cervical dystonia, looks like you've made some significant data on is the current coverage, at least on the commercial side. Maybe just talk about the nature of that coverage, how it compares to the other neurotoxins on whether it will impede usage outside of cervical dystonia? And maybe just cover also your plans and time lines for Medicare coverage. Thanks.
Mark Foley
Sure. So on the covered side of it, if you look at the commercial category within CD., it's about 60% of the overall CD. lives. We're over 50% already. And within that, about almost two thirds of that coverage is going to be first-line therapy. So we feel like at least in CD coming into the market, we've got a really strong position within the commercial payer community in terms of our ability to compete effectively and not have any step edits or limits.
And within the commercial category, maybe 14%, we'll have a step at it. And so we'll continue to work to knock that down with additional payer data right now, we don't have a lot of payer data to go back to those. And so we really like sort of the response that we've gotten in the adoption. We've made great product progress with a lot of the top groups there.
On the Medicare side, we already have 100% coverage on the Medicare side, that's about 20% of the market. And then, you know, same thing on the federal side, and we have a little bit more work to do on the Medicaid side of it. But all in all, the has made tremendous progress in terms of the overall coverage side of it.
With respect to spontaneous use, obviously we can only promote for CT, but there are a number of the coverage policies. We are agnostic to the toxin. So you have some that will look at toxins as a sort of a general category in. If you get oxygen coverage within that payer network, then they leave it up to the physicians to ultimately use the product in a way that they that they see fit, others will allow for coverage of other indications with additional data on it doesn't need to be indication data.
It could be additional data and then some are very rigid in terms of only covering those indications where you have an FDA approval. So we feel like we're really well positioned in cervical dystonia, and we're also encouraged by some of the payers that are looking at. This is sort of a generic category where the approval of diversify. We'll allow the payers to ultimately manage the category the way that they think makes the most sense along with the clinicians.
Serge Belanger
Thanks, (inaudible) .
Mark Foley
Thank you.
Operator
(Operator Instructions)
Uy Ear, Mizuho.
Thanks for taking my question. This is Charles on for Uy. I guess I had a question about the expanded label for the arch three launch? And just on, do you think that's going to be a modest contribution to the sales in this year? Thanks.
Mark Foley
Sure. Well, I mean the nice thing about the indication is you can teach train market promote to it. And given that Ellipse is the most commonly performed HA filler procedure and having that ability to directly target, promote, teach, train and go after it definitely helps. And so it's another thing to talk about. And I think it speaks to the ongoing innovation pipeline that the octane is bringing forward and the RHA line.
And so it's just yet another thing for us to get in front of customers to talk about. It allows us to get behind it from a promotional standpoint. So does not sound like it's the kind of thing that's going to create step function difference in the growth, but it does all help and contribute to the ability for us to have something else to talk to customers about and to get trial perhaps in accounts that maybe had not yet leaned in and it fits also really well with our density, which is used for period or aligns.
And so it's a nice combination of using our RHA3 for lip fullness and then using our RHA route density for the areas kind of around the lips. And so it just again gives us yet it's more to talk about with our customers more reason to engage and more reason to get trial.
Thanks very helpful. Thank you.
Mark Foley
Thank you.
Operator
Thank you. And this will conclude the Revance Therapeutics Fourth Quarter and Full Year 2023 financial results and corporate update conference call. Thank you all for joining. You may now disconnect your lines.
