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MAY 14, 2018
Evolus
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most recently senior vice president of U.S.
medical aesthetics at Allergan PLC.
“I was at Allergan for 13 years … I learned
a lot about the aesthetics space and the tremen-
dous potential, despite the fact of such high
growth,” said Moatazedi, noting that when he
joined Allergan, its cosmetic unit had a single
product: Botox.
He pointed out that only one in 10 patients
considering getting a Botox treatment is being
treated today and that there’s “tremendous po-
tential” to tap the remaining 90%. The global
aesthetic neurotoxin market generated an esti-
mated $1.8 billion last year and is projected to
grow to approximately $2.3 billion by 2020,
the company said.
The Irvine-based medical aesthetics com-
pany’s first product, DWP-450, an injectable
neurotoxin targeting moderate to severe frown
lines between the eyebrows, is pending regu-
latory approval. The drug produces similar
cosmetic effects to Botox’.
The company submitted the indication for
Food and Drug Administration approval in
July.
The Toxin Game
Allergan leads the pack in facial injectables,
holding more than 45% of global market share,
according to a report by Research and Markets.
“I look at the other toxins after Botox—com-
petitors [like] Dysport and Xeomin—and those
weren’t really alternatives to Botox,”
Moatazedi said.
While Botox, Dysport and Xeomin are used
as facial injectables that temporarily alter nerve
impulses of targeted muscles and thereby re-
Gigasavvy
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Gigasavvy has been able to sign companies it
would have previously turned away because
of their smaller marketing budgets—a com-
mon practice of large agencies preferring a
hefty minimum spend from clients.
In one month, Gigasavvy closed more than
$200,000 in new business by adding clients
such as Santa Ana-based nonprofit Orange-
wood Foundation and Costa Mesa-based in-
terior design and merchandising firm Ver
Designs. It’s in talks to add clients in retail,
professional services, and the lifestyle and
restaurant industries. It declined to disclose
the financial terms of the merger.
Irvine-based Gigasavvy is ranked No. 18 on
the Business Journal’s list of advertising agen-
cies, with $16.4 million in revenue last year,
a 2% increase from 2016. Svoboda started her
agency last year in Huntington Beach.
Susan Franceschini, executive director of
ad industry trade group ThinkLA, said adver-
tisers are increasingly asking for project-based
relationships, citing Procter & Gamble’s an-
nouncement last month to hand out more proj-
ects to a roster of agencies while keeping an
agency-of-record on retainer for major cre-
ative work.
She said the industry shift has many agen-
cies scrambling to reformulate a business
model that’s traditionally been favorable to
big agencies with Fortune 50 clients that often
stick around for over 20 years.
“[Gigasavvy is] smart to say we can help
small businesses, too, because they’re not
turning away business,” Franceschini said.
“Being nimble is key, and it’s harder for large
shops to pivot like that.”
Tailor-Made
Johnston said budget and staffing con-
straints make it difficult for agencies like Gi-
gasavvy to help emerging brands that often
www.ocbj.com
Evolus Inc.
I Headquarters: Irvine
I Business: Medical aesthetics company
focused on self-pay market
I Founded: 2012
I Ticker symbol: EOLS (Nasdaq)
I Market value: $186.5 million
I Notable: Raised $60 million in February
IPO; anticipates FDA OK for neurotoxin
similar to Botox
EOLS 14
5 care, where doctors sell medical products to
Feb. March May
duce or eliminate contraction-induced wrin-
kles, they differ in onset speed, diffusion,
strength and duration.
Moatazedi said DWP-450 is the “first mol-
ecule that is a Botox alternative” and not a
competitor “with compromise.”
Dysport is developed by French pharmaceu-
tical maker Ipsen SA and marketed in the U.S.
by Medicis Pharmaceutical, a subsidiary of
Bridgewater, N.J.-based Valeant Pharmaceu-
ticals International Inc. Xeomin is made by
Merz Pharma GmbH & Co. KGaA.
Moatazedi said he admires athletic-wear
brand company Under Armour Inc., an early
adopter of the athleisure apparel trend that
went from being an underdog brand to being
viewed as a competitor to established brands,
such as Adidas AG and Nike Inc.
Johnston and Svoboda set their sights on building new approach to helping small businesses
need a custom approach.
The 10-year-old creative agency, known
for its digital work, has 32 employees and
built its business with high-profile clients,
such as Toshiba, Chapman University,
Wahoo’s Fish Taco and Molina Healthcare.
“You get a brand that is great for your port-
folio or for the company in other ways but for
whatever reason just doesn’t meet your min-
imum threshold,” he said. “Agencies make
exceptions, but sometimes it’s not the best
move because you’re still trying to take the
same people that are working on big brand X
to then work on some of these smaller ac-
counts that need a very custom approach.”
Svoboda said the framework for the new
division was modeled after her own firm,
whose clients include Costa Mesa-based
companies b.spoke and Creative Window
Designs.
Sunday Brunch would custom-build
teams based on each client’s needs, and the
work was typically project-based. It allowed
the agency to swim in an ocean of clients,
and more importantly, help emerging brands
Moatazedi, who spoke with the Business
Journal after “just 48 hours on the job,” said
Evolus has a quality product with brand recog-
nition that can benefit from being very nimble
and customer-centric.
Allergan appointed Carrie Strom to replace
Moatazedi as senior vice president of U.S.
medical aesthetics, reporting to Chief Com-
mercial Officer Bill Meury.
Strom joined Allergan in 2011, most re-
cently serving as vice president of marketing
for plastic surgery and regenerative medicine.
She was also vice president of marketing for
SkinMedica, leading the skincare product
brand’s new e-commerce platform.
Creating Demand
Evolus’ primary market is self-pay health-
consumers or use them in procedures that
aren’t reimbursed, which means growth will
be driven by consumers and providers, accord-
ing to Moatazedi.
“This market is very much about consumer
penetration, and new entrants will need to con-
sider value proposition around those two con-
stituents.”
The company said it plans to build a sales
and marketing team to commercialize DWP-
450, launching its own sales force in the U.S.,
starting with a 65-person team within the first
year of commercial launch and growing to 150
representatives over time if it gets FDA ap-
proval, according to Securities and Exchange
Commission filings. It also plans to grow
brand awareness through national public rela-
tions, social media and direct-to-consumer
media campaigns.
DWP-450 is licensed from Daewoong
Pharmaceutical Co. Ltd. in South Korea.
Evolus employs nearly 30 people between
in OC.
“You talk about big agencies, small agen-
cies, but ultimately it’s about building up the
reputation that Orange County is a destina-
tion market,” she said. “This is a hub for ad-
vertising, and the conversation just hasn’t
been elevated yet to tell everybody that
there’s great talent here, there’s great work
coming out of Orange County, and we want
to lead that charge.”
But Franceschini warns that the key to sus-
taining the model will depend on keeping
larger clients happy.
“If you’ve got some agency-of-record
clients then overlay it by saying, ‘OK, 50%
is AOR and 50% is project-driven,’ then it
can likely happen, but that’s a luxury,” she
said. “If you don’t have a steady stream of
cash flow how do you support employees and
benefits?”
All Aboard
Johnston admits that it took “lots of white-
boarding” to figure out a way to make the di-
vision sustainable, and quick demand from
ORANGE COUNTY BUSINESS JOURNAL 67
Irvine and a research and development facility
in Santa Barbara. Moatazedi said it’s searching
for a chief financial officer.
Just Evolus
Moatazedi succeeds Murthy Simhamb-
hatla, who came to helm Evolus last year fol-
lowing his ascension at Alphaeon Corp.,
which was Evolus’ parent.
Simhambhatla confirmed he’s no longer in-
volved with either company—“I resigned
from Alphaeon when we spun out Evolus and
took it public,” he said.
Vikram Malik, a managing partner of New-
port Beach-based Strathspey Crown Hold-
ings LLC since 2013, is Evolus’ chairman.
Newport Beach-based lifestyle healthcare-
focused investment firm Strathspey founded
Alphaeon in 2013 as a lifestyle medicine com-
pany that provided and invested in products
and services not covered by health insurance.
Evolus was one of Alphaeon’s portfolio com-
panies at the time.
The platform, which also included
ShoutMD, a social media network that allows
doctors to review and rate products used in
their practices, and a credit platform offering
financing services, was well-funded by doc-
tors. It was at one time the hyped-up, darling
unicorn of Orange County, except that the ini-
tial public offering never happened. Simhamb-
hatla, a senior Strathspey partner, replaced
Robert Grant as Alphaeon chief executive in
2016 and narrowed the company’s strategy to
developing the neurotoxin.
Moatazedi said Evolus is an independent
publicly traded company whose largest share-
holder is Alphaeon, a subsidiary of Strathspey.
He’s solely focused on growing Evolus’ toxin
platform and has no involvement in Alphaeon
or Strathspey. I
interested brands has shown it can work.
One organization it signed on last month
was the Orangewood Foundation following a
conversation between Johnston and Orange-
wood Chief Executive Chris Simonsen.
Sara Bazant, Orangewood’s director of
marketing, said it was the first time the non-
profit partnered with an agency of Gi-
gasavvy’s size.
“Honestly, we had not been seeking out a
marketing agency. Our budgets are limited,
but we worked with them on what a contract
might look like,” she said. “Our board was
willing to make an investment, which is
something we hadn’t really done with mar-
keting for a number of years.”
Companies lacking the ability to invest
heavily in marketing campaigns will manage
its advertising in-house or hire freelancers,
Johnston said.
Svoboda, who also serves as president of
the OC chapter of the American Advertising
Federation, added that Gigasavvy helps or-
ganizations create a cohesive marketing strat-
egy that tells a consistent brand
story—something difficult to do when hiring
multiple, independent freelancers to work on
separate projects.
“They’re able to come to us and get a high-
end solution to their business that really
makes a huge impact,” she said. “Not only do
we want to help them grow their business, but
we’re growing and supporting businesses in
Orange County—for it to grow here and
thrive, which helps us retain our talent and
grow the economy here.”
And it keeps Gigasavvy healthy enough
to fend off a potential acquisition from large
holding companies like WPP, Johnston
said.
“When we sat down as leadership and
talked about the end goal of the company, [it
was] to build this up to be one of the larger
independent shops, which is definitely a chal-
lenge, but this [merger], in our mind, was one
of the steps to get there.” I