Revance Therapeutics Inc (RVNC) Q3 2021 Earnings Call Transcript

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Revance Therapeutics Inc (RVNC 3.30%)
Q3 2021 Earnings Call
Nov 9, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Welcome to Revance Therapeutics Third Quarter 2021 Financial Results and Corporate Update Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, November 9, 2021.

I would now like to turn the conference call over to Jessica Serra, Head of Investor Relations and ESG for Revance. Please go ahead.

Jessica Serra -- Head of Investor Relations

Thank you, Laurie. Joining us on the call today from Revance our Chief Executive Officer, Mark Foley; President, Dustin Sjuts; Chief Financial Officer, Tobin Schilke; and Senior Vice President of Clinical Development, Roman Rubio.

During this conference call, management will make forward-looking statements including statements related to the potential approval and timing of approval, the DaxibotulinumtoxinA for injections and borrowings and therapeutic indications. Our ability to remediate deficiencies identified by the FDA regarding our BLA Type A meeting with an FDA, financial performance, revenue and processing volume runway, financial performance and guidance, expect the cash runway, our strategic priorities and cash preservation plans, a market and revenue opportunity that the market demand for our products and services, the safety and efficacy under duration of DaxibotulinumtoxinA for injection, potential commercial success and growth of our products and services. The potential benefits of our drug product candidates and technologies. The clinical development of our product candidates. Our business strategy, planned operations, commercialization plans in Aesthetics and Therapeutics industry. These forward-looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties. 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.

Also on today's call we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our earnings release.

With that, I will turn the call over to Mark Foley. Mark?

Mark Foley -- President & Chief Executive Officer

Thank you, Jessica. Good afternoon everyone and thanks for joining our third quarter 2021 financial results. Before we cover our performance for the third quarter and review the positive results from our Phase III ASPEN open-label study for cervical dystonia. I'd like to provide an update on our BLA for DaxibotulinumtoxinA for injection in glabellar lines.

As most of you are aware, we received the CRL from the FDA on October 15. So I think our inability to approve our application and it's for this quarter. Due to efficiencies related to the on-site inspection or manufacturing facility. We're obviously very disappointed by the FDA's response and also understand that the continued delay of our BLA has been frustrating for all of our stakeholders. However, I can assure you that the entire Revance team determined as ever to get our neuromodulator product approved as soon as possible. We are currently working on preparing a briefing book for a Type A meeting to gain clarity and alignment on the requirements needed for approval. And are incorporating the additional information that was provided by the FDA following our CRL including our establishment inspection report or to inform our submission.

Given where we are in this process and our pending engagement with the agency, it is an appropriate for us to comment beyond what we've already communicated until we have our Type A meeting. Before we providing an update, once we have confirmation on our pathway to approval. This is not the first-time we've experienced a launch delay. Call the last year the commercial rollout of our was pushed back 5 months due to COVID induced supply chain constraints from our partner, DaxibotulinumtoxinA. In spite of the delay and working under the limited parameters the pandemic we think we on-boarded over 100 sales reps, trained injectors and delivered a very successful launch that generated $58 million in its first 12 months and a revenue run rate of over $70 million as of Q3 2021.

Looking back on proud of the tremendous progress we've made as an organization over the past few years. First and foremost in Aesthetics, we submitted our BLA for our lead product DaxibotulinumtoxinA for injection for other lines. We also successfully completed a Phase II program for our drug product upper facial lines security, the exclusive distribution rights for EHA line of fillers in the US acquire HintMD and launched built out strong commercial infrastructure.

In Therapeutics, we validated the opportunity for our long-acting neuromodulator for treating muscle movement disorders, with the successful completion of our Phase III program in the treatment of cervical dystonia and our Phase II clinical trial for upper limb spasticity. Collectively, the muscle movement disorder market opportunity currently stands at $1.2 billion worldwide and about 78% of that opportunity in the U.S. The completion of our program, productive DaxibotulinumtoxinA Cervical dystonia, the company's second successfully executed Phase III program supporting the differentiated performance profile of our neuromodulator across trials in Aesthetics and Therapeutics; all of these milestones position us to create meaningful value within our Aesthetics and Therapeutic franchises.

To put it simply the opportunity for a long-acting neuromodulator remains strong and continues to be an unmet need for patients and consumers. We continue to believe in the approvability of our product and as based on the CRL the deficiencies cited were limited 2 observations made during the agencies on-site inspection of our manufacturing facility. In other words, the CRL not related for clinical data package or products anticipated label. After that I'd like to outline our strategic priorities going forward, while also announcing some related organizational changes. Our number one strategic priority is to obtain FDA approval for DaxibotulinumtoxinA for injection both outlined to possible.

Number two is to continue to increase our revenue and the $1.2 billion US dermal filler market with our R&D Collection. And number three is to expand and cultivate deep and lasting customer relationships, through OPUL, our Fintech platform. In addition to aligning our capital allocation strategy with these priorities we will also be preserving cash to enhance our financial flexibility.

So, Dustin and we will cover more of the specifics of our priorities later in the call. In line with our strategic initiatives and in order to optimize our structure performance, I'm pleased to announce the promotion of Dustin Sjuts, our Chief Commercial Officer to President of Revance. This change allows me to streamline my reports as I teamed directed personal oversight all aspects of our BLA for DaxibotulinumtoxinA for injection. Further, this change positions the organization to better align resources, facilitate capital allocation efforts and enhanced performance promotion. Dustin's promotion to President reflect the strong performance and confidence we have in its leadership with an instrumental in developing Revance's commercial strategy, integrating HintMD, building an exceptional team and separately commercializing our Aesthetics portfolio. And with this experienced of the background we'll continue to be valuable to our organization.

With that, I will turn the call over to Dustin, who will cover our performance for the quarter. Dustin?

Dustin Sjuts -- Chief Commercial Officer of Aesthetics & Therapeutics

Thank you, Mark. First of I will thanks by saying honored to serve as President of Revance. Thank you, Mark for comment we come a long way over the past 2 years in laying the foundation for growth. None of that would be possible without our team.

My years overseen commercial operations interfacing with apartments across the organization. I continue to believe that we have the right vision, strategy and people in place to realize our potential across both Aesthetics and Therapeutics. The market demand for long lasting neuromodulator remain robust. And this is supported by recent clinical program initiated by our peers to attempt to show extended duration to higher doses of their existing neuromodulator formulation. Our formulation is new and uniquely different and what's available in the market today. It's the only neuromodulator product with a proprietary peptide formulation with clinical data demonstrating a long duration profile in addition to safety and efficacy.

And with the current studies a 40 unit doses of DaxibotulinumtoxinA for injection so the median duration of effect of 6 months and up to 9 months for certain patients. Further, there are strong clinical data for esthetic indications glabellar lines, forehead lines, lateral canthal lines and upper facial lines as well as therapeutic indications in cervical dystonia. Now for limb spasticity, we have all consistently demonstrated a long duration profile. For these reasons, we believe DaxibotulinumtoxinA for injection is the most differentiated potential neuromodulator formulations today.

Turning to our results. Total RHA revenue for the third quarter is $18.3 million, a 7% increase over Q2 despite a slower period. Growth was driven by higher sales from existing accounts as well as the addition of new accounts. During the quarter, we had over 500 count across RHA and our Fintech platform, bringing our total aesthetic accounts to over 2500.

Looking ahead and given the continued strength in the overall market, we expect a seasonally strong Q4 heading into the holiday season. At this commercial launch one year ago, the RHA collection is proving to be a valuable differentiated product line is most natural at least modified hyaluronic acid dermal filler on the market today, and we're pleased with the trend, the traction we have built thus far. Our commercial team is focused on expanding the prestige customer base for RHA which in turn directly as the commercial foundation for DaxibotulinumtoxinA for injection once approved.

We believe that we can realize significant cross-selling opportunities operating leverage with our Aesthetics franchise over time. OPUL, the first relational commerce platform for the Aesthetics vertical add another exciting feet to our portfolio. We long believe that the best way to retain and attract customers is to be a true partner to help them build a better practices and stronger consumer loyalty. It puts us develop a Fintech platform that not only complement our product offering but also support practice growth. OPUL leverages data from this transaction to help owners of a better relationship with their customer. It's a first of its kind technology platform that we believe has the ability to transform patient and physician experience. This help another create deep and lasting customer relationships. OPUL provide us with the you need to participate in the $68 billion in U.S. FedEx payment processing market. And now, as a registered payback. But we can capture more of the credit card processing value chain. Over time, we believe this represent a substantial revenue opportunity north of $500 million.

During the third quarter we maintained a payment processing volume run rate over $0.5 billion despite a traditionally slower season. Looking ahead, we believe OPUL have a signal runway for growth. We're very focused on account penetration, building new features and completing customer migrations in HintMD Global. Looking at Therapeutics, I'd like to share the positive top line results from our Phase III ASPEN open-label study for cervical dystonia. As a reminder, our Phase III program consists of two trial; ASPEN1 and the ASPEN-OLS were open-label safety study. ASPEN1 was the pivotal study evaluating the efficacy of DaxibotulinumtoxinA for injection for the treatment of cervical dystonia and was successfully completed in October of 2020. ASPEN-OLS was an open label multicenter trial to evaluate the long-term safety of repeat treatments of DaxibotulinumtoxinA for injection in adults with cervical dystonia.

The study role of pool of 357 subjects of which approximately 90% rollover from the ASPEN1 study. Subjects could receive up to 4 treatments over 52-week period and the doses evaluated included 125, 200, 250 and 300 units. We are pleased to report that the study demonstrated DaxibotulinumtoxinA for injection in the strategy, generally safe and well tolerated, as well as effective across all doses with repeat treatment. The most common trigger related adverse events on a per treatment basis for muscular weakness at 4.9%, dysphagia at 4.2%, and injection by pain at $2.7. There were no serious treatment-related adverse events were dose-dependent increases in adverse events.

We're pleased to see the efficacy data in the ASPEN-OLS is consistent with the efficacy results and duration result observed in ASPEN1 study. In ASPEN-OLS study, median duration of as defined by the time to reach target twister score range from 19.9 weeks to 26 weeks across doses within the valuable treatment sites. Comparatively median duration of effect observed as in ASPEN1 study for 20 to 24 weeks for 250 units at 125 units. Given the safety, efficacy and long duration profile, we continue to believe that DaxibotulinumtoxinA for injection can be a promising to new treatment option for adults with this condition. In particular, we compelling dose ranging data from the study to help physicians optimize triggered plans for patients.

Firstly, is the dosing strategy and treatment effect can vary with each phases. ASPEN3 clinical programs is our second successfully completed Phase III program production costs a lot of DaxibotulinumtoxinA for injection across two different categories. And we'll asses the best way to advance our opportunity in cervical dystonia for those spasticity following clarity from the FDA on the approval path for VLA for gabelar1.

With that, I will turn the call over to Toby to cover our third quarter financials.

Tobin Schilke -- Chief Financial Officer

Thanks, Dustin. Total revenue was $19.7 million for the third quarter which included $18.3 million from our RHA collection. $1.1 million from our partnership with Viatris on the biosimilar to BOTOX and $0.3 million from our Fintech platform.

Turning to our operating expense; selling, general, and administrative expenses for the third quarter was $52.8 million. This primarily included the sales and marketing expenses related to RHA in pre-commercial activities for DaxibotulinumtoxinA for injection. SG&A expenses include depreciation, amortization and stock-based compensation. Excluding these expenses, non-GAAP SG&A expenses were $45.1 million. Research and development expenses were $30.1 million for the third quarter reflecting costs related to clinical trials, regulatory support for ongoing VLA, pre-commercial manufacturing and quality activities and Fintech platform development.

R&D expenses including depreciation and amortization and stock-based compensation. Excluding these expenses, non-GAAP R&D expenses were $25.7 million. Cash, cash equivalents and short-term investments as of September 30, 2021 were $273.7 million. Revance's shares of common stock outstanding as of October 28, 2021 for approximately $71.8 million with 76.8 million fully diluted shares excluding the impact of convertible debt.

Now, I'd like to review our capital allocation priorities and the prudent measures we are taking to extend our cash runway. As Mark, and Dustin mentioned, our investments at this time focused on obtaining FDA approval for DaxibotulinumtoxinA for injection, driving greater adoption of RHA and expanding and deepening our customer relationships through OPUL. We believe this will maintain our strong commercial momentum and enhance our financial flexibility. The proactive steps we are taking to preserve cash include but are not limited to I think non-critical hires referring a Phase III clinical program for upper limb spasticity as well as other therapeutic pipeline activities and powering international regulatory and commercial investments for DaxibotulinumtoxinA for injection, with the exception of our collaboration with Fosun in China.

Due to the CRL, we received from the FDA; we are withdrawing our previously stated cash guidance of cash into 2024 which assumed FDA approval DaxibotulinumtoxinA for injection in 2021. Following our Type A meeting with the agency and upon gain clarity for on our approval pathway we plan to provide an updated cash guidance and our 2022 GAAP and non-GAAP operating expense guidance.

I'd like to emphasize that while our measures to preserve cash are important we also expect them to be temporary. We remain committed to building our business long-term and particularly our therapeutics franchise given the strong clinical data we have accumulated underscoring the differentiated performance profile of DaxibotulinumtoxinA for injection.

With that, I'll turn the call back over to Mark.

Mark Foley -- President & Chief Executive Officer

Thank you. Toby. In closing, we executed on our commercial strategy and delivered a strong Q3 in our base business, despite the impact of seasonality. We're also very pleased to advance our therapeutic potential for treating cervical dystonia in completion of our Phase III ASPEN OLS study clinical program representing a market opportunity, north of $300 million in the US.

In the near term, obtaining FDA approval is our top priority. As we speak we are preparing a briefing endorsement to check each request and we'll provide an update once we have confirmation on our path forward.

With that I will now open the call up for questions. Operator?

Questions and Answers:

Operator

Thank you. [Operator Instructions] And our first question is from Ken Cacciatore of Cowen and Company. Your line is open.

Kenneth Cacciatore -- Cowen & Company -- Analyst

Hey, Mark and team question around the CRL. I know when you receive that there was a little bit of lack of clarity into all the different things that were being asked for. I know you now indicated you have established inspection reports. I'm wondering if that provided do any currently any more clarity as it provide any more comfort or discomfort after you've now seen that. And then secondly, can you just talk about the folks that you've been working with both internally and externally. Consulting which you that have expertise here. Have you changed that at all other folks you've brought in or is it the same folks and you feel fairly comfortable with who is helping you navigate through the process. Thanks so much.

Mark Foley -- President & Chief Executive Officer

Thanks, Ken. And so, first on the CRL. As we mentioned at the time that we received the CRL, there was no clarity exactly on which of our responses to the Board, it creates, we're going to be sufficient or not sufficient and we indicated at that time. The prior to requesting its IPO, we're hoping to gain additional clarity from the agency before filing Type A meeting request. Subsequently, as we commented on our prepared remarks that we have received established the EIR and additional feedback from the agency, which is going to dive sort of the submission of the Type A meeting request. We continue to feel really good about the responses that we provided to the 483 [Phonetic]; this will allow us to target more of those responses. So at this point we're not going to get into sort of surmising anything. We're getting into sort of play by play with the agency. We do feel like the Type A meeting is a point where we plan to get more clarity from the agency and we'll provide more context and color at that time.

On the consultant side of it, we feel, first off, really good with the response that we provided to the 483 [Phonetic]. We were frankly surprised that we didn't have any communication from the agency along that journey and so receipt of the CRL in response to the our 42 responses with disappointing and surprising. Given that however in the sort of the importance of getting our product on market as soon as possible, we certainly continue to leverage the external experts that we used along the entire PLA journey and have thought out additional experts and advisors along the way to make sure that we are getting the benefit of the latest information, and the best information that's out there and so again this is number one priority. We're looking at sort of all different avenues to try and get our product onto the market as soon as possible. And again, with this additional information is allowed us to refine our Type FDA request.

Kenneth Cacciatore -- Cowen & Company -- Analyst

Thanks, Mark. Okay, continued good luck in the process.

Mark Foley -- President & Chief Executive Officer

Thank you.

Operator

And our next question is from David Amsellem of Piper Sandler. Your line is open.

David Amsellem -- Piper Sandler -- Analyst

Hey, thanks. So just a couple on the CRL and the path forward here. So you know the FDA action was essentially delayed for almost a year due to pandemic related constraints. So I wanted to ask you to the extent that you can answer those assuming the agency is going to go have to go back into the facility and do an inspection is the pandemic in anyway factor into your calculation regarding turnaround time and how should we think about that and maybe do you have any sort of feedback from the FDA as to what their constraints. So it's all right now since that has been a consideration in the past. So that's number one. And then number 2 is with these kinds of processes with consultants, internal consultants, external consultants, etcetera.

Do you have a sense of what kind of spend you might need or additional spend, if you will, to get to a point where you have all your ducks in a row in terms of manufacturing and maybe you don't know the answer to that, maybe that's post-type anything but can you just help us understand, just call at least qualitatively what your thoughts are there. Thanks.

Mark Foley -- President & Chief Executive Officer

Sure. So first David, on your question around the CRL in the path forward. Any impacts from the pandemic, again I, it was, and I guess it's sort of the desire for clarity and even internally, we're trying to make sure that we're being as transparent as we can. I think given where we are, we want to make sure that when we do communicate and communicate with certainty and clarity and so right now would be speculating further as to whether be pandemic related issues in terms of timing. Again, we believe that the best way to get clarity on this is through a Type A meeting, obviously the sooner we can get that clarity to better and once we get that I think we'll be able to lay up with a lot more certainty exactly what the path forward is going to be and what it's going to take.

On the consulting side of it, in terms of spend and manufacturing and everything else we talked earlier about sort of the priorities that we laid out, it's getting approval, it's delivering on the RHA revenue and continuing to product option of the overall platform while being judicious with our spend and so we believe we've got the right plan in place and all of those appropriately to make sure that we continue to not lose momentum and deliver on those key priorities for the company.

David Amsellem -- Piper Sandler -- Analyst

Okay, thank you.

Mark Foley -- President & Chief Executive Officer

Thank you.

Operator

And our next question is from Seamus Fernandez of Guggenheim. Your line is open.

Seamus Fernandez -- Guggenheim Securities -- Analyst

Yes, OK. Great, thanks for the question. So just a couple of quick ones. I'll move beyond the CRL but wanted to just get a sense of how the trajectory for the RHA fillers you feel is likely to continue into the fourth quarter and into next year. It sounds like there is high conviction that continued growth will be there, but it is our understanding that DAXI was also sort of a forward use opportunity for some of your key physician so is the goal next year to really broaden out the RHA account number substantially beyond sort of the 2500 or is it really to increase the penetration of the existing practices. I know that I'm sure you're going to increase penetration of the existing practices as part of the standard. But the question is this, does the pullback on spending limit your ability to expand to new accounts in any way, shape or form. And I have a second question after that.

Mark Foley -- President & Chief Executive Officer

Maybe I'll jump in and maybe Dustin add a little context and color as well. The first off, in terms of the trajectory only start by saying we're incredibly pleased with how well RHA launch has gone. I mean you know in a short period of time we validated the strategy we generated really good revenue growth. And I think it to the strategy and the execution of our in this out there and the quality of the RHA product line. We're also still looking forward to getting RHA product line approved, which we also think will help going forward. So a couple of market thing, I think the overall market dynamics continue to be really healthy, so consumers, engaging and facial injectables that continues to be really robust market.

We think in our Q4 seasonally tends to be stronger than Q3. So that's all good. And then if you look at sort of the headwinds and the tailwinds. On the tailwind side of it, you've got ongoing focus on the RHA product line, which would have competed for a little bit of time with the launch of our neuromodulator. So, we'll continue to drive that. But you mentioned, Seamus, the number of accounts, we've talked about we're going after the prestige category in the market, which is the top third, which is roughly 50,000 or so, which we said we kind of get into roughly half of those were kind of 2500 on net journey adding roughly 500 accounts per quarter. So we do think that there is still room to drive ongoing penetration there. Countering that a little bit is, obviously we know that having a neuromodulator in our bag will also help unlock opportunity in some accounts.

So again, wins we've got focus, we've got new accounts that we can open and then headwinds. I think partnering with the neuromodulator but we are heading into sort of a strong season. And request Dustin, if you want to add anything to that.

Dustin Sjuts -- Chief Commercial Officer of Aesthetics & Therapeutics

Just a couple of things I think the strategy for our Aesthetics focus on the accounts and non-driving consumers loyalty beyond the agnostic of an account has really resonated. Net resonated well with RHA and we get a lift on that. I will address the spin for question as well. We feel very confident that we laid out those strategic priorities. We're able to make adjustments and resources to ensure that we're not choking to spend in the RHA align and investing in those things that have the highest return very good growing market of dermal fillers, and we think that will continue to be able to drive growth. Well, I'd be great to have actually right now we feel like we can utilize this time to focus on RHA. And the demand for there I guess countless calls from doctors already asking when it's coming. When is coming, as you can imagine. So we feel like we could use that momentum around the aesthetic strategy was both with RHA to get us started and grow both new accounts, as well as our penetration.

Seamus Fernandez -- Guggenheim Securities -- Analyst

Great. And then, just in terms of the planned filing for CD. But I think we were anticipating this year, how should we think about the CRL. The manufacturing discussion points and when you'll be able to provide us with a detailed update on the overall sort of filing strategy in 2023, will that come alongside the Type A, the post Type A meeting updates or will that come perhaps at a later point in time.

Mark Foley -- President & Chief Executive Officer

The suggested to reset sort of what we communicated on CD with a complete sort of that well as program in 21 file in 22 approval in 23 and now that we've completed the overall Phase 3 program. We are certainly in a position to be able to file that our strategy all along with few as a BLA supplement choosing go about our lines approval. We continue to think that that's the most prudent strategy and approach. However, given the linkage between the SBLA [Phonetic] filing and the approval of our lines indication. I think the most appropriate time to give an update on that. We're going to be after I may need. We will have more clarity and visibility.

Seamus Fernandez -- Guggenheim Securities -- Analyst

Great. And then, just one final question. Any visibility on the actual timing or kind of the regulatory timing of the Type A meeting itself. It was our understanding that it would be probably take 2 weeks to request and then 30 days post that to actually get the meeting, but we're hearing about some delays at FDA, a lot of backlog. Just wanted to see if there was any sort of a general clarity on that. That you might be able to provide. Just even outside possibility that this could be kind of an end of Q1 meeting is something that we're getting questions from investors on. Thanks.

Mark Foley -- President & Chief Executive Officer

Sure. I'll go back to kind of Ken's early question again what we indicated previously when we received the CRL. Given that there wasn't any specifics. And then the CRL itself, we're hoping to get a little bit more clarity, which we now have sort of refine the meeting request binder that we put together. So we think we've got that clarity to guide that filing. And then, we know what the statutory timelines are typically 14 days them sort review and make a decision on branding and Type A meeting or not. And then that could schedule within 30 days. Certainly with the pandemic, I'm sure there are scenarios where that could get pushed out. We're hopeful that that will stay on track and on target. And again, our plan is to communicate with clarity once we once we've had the Type A meeting.

Seamus Fernandez -- Guggenheim Securities -- Analyst

Great. Thanks, guys.

Mark Foley -- President & Chief Executive Officer

Thanks.

Operator

And our next question is from Annabel Samimy of Stifel. Your line is open.

Nicholas Rubino -- Stifel -- Analyst

Good afternoon, everyone. This is Nick Rubino on for Annabel. Thanks for taking our questions. And congratulations. Dustin. So, you mentioned the double dosing regimens from competitors. What have you seen in the marketplace in terms of trends toward practices utilizing this method. And do you see the economics around this regimen potentially infringing on DAXI's value prop? And then, just a quick one. At the end of Phase II meeting change anything about how you're thinking about the JUNIPER study going forward. I know it's kind of on the back burner for now, but just any thoughts around that meeting. Thank you.

Dustin Sjuts -- Chief Commercial Officer of Aesthetics & Therapeutics

First on double dosing, anything I think we looked at it this for further prudentially a long acting neuromodulator opportunity. I think if you go back in time, there were sort of a long narrative that there really wasn't a need in the patients did on it back pretty quickly. Now, it's going to a point where people recognize that there is a real need in the market and I think that it's reassuring to see competitors starting to talk about long-acting category. However, these products have been in the market for over 30 years and a lot of effort has been put into trying to characterize different dosing in different ways of evaluating performance so until there's true Phase III data out there that looks at it.

We continue to think that in the absence of the differentiated formulation is going to be hard to match the duration profile matched with the safety and efficacy of our product. So we continue to feel like there is a huge opportunity on that. We mentioned the economic certainly start getting into double dosing with conventional short-acting neuromodulators. We do start to bump up against sort of what's the affordability of that and as we've talked in the in terms of positioning, we think that there is an ability for us to get a premium for customers to pay a premium and fast to make more margin, but we think that the economics with our product whereas with some of the higher dosing. I think that's a little bit of a TBD. On the end of Phase II, you will, that's program, we are very encouraged by the feedback that we received from the agency and that a big to meeting, so we now have clarity around the Phase III program. Program that will be needed to move that forward and ultimately seek approval for that indication.

As Toby mentioned in his remarks, given sort of the need to prioritize the approval, the DLA the ongoing sort of adoption of the RHA line of filler products and getting full out into the marketplace. We're going to pause sort of the Phase III program. But again, this is not a and if it's the and we will have to sort of resume activities around our therapeutic pipeline, once we feel that we're in a position to do so, but again very good and a Phase II meeting with the agency we believe and we've got the 30 that we're looking for on our Phase III program out there.

Nicholas Rubino -- Stifel -- Analyst

Great, thank you. And just a quick clarification. Are you seeing the double dosing as far as actually being used in the market is, are you seeing trends of that increasing like are more people doing that now versus before or is it more just it's generating clinical buzz as opposed to commercial use.

Dustin Sjuts -- Chief Commercial Officer of Aesthetics & Therapeutics

Hey, Nick. This is Dustin. We actually haven't seen really resonating. These are clinical trial, a lot of these have been IITs other focusing [Phonetic] other Phase IV, so the rigor of those is not necessarily the same in the Phase III program stringent endpoint. I think it's a novel concept that people are trying to do as it relates to cut of data generation. The practicality is I don't believe any manufacturer is cut the price in half, and they haven't done that. The value for the practice just trying to do that for a slightly increased duration profile is one that doesn't seem to resonate and also there was a bit long-term safety on increasing the neuromodulator dosing to try to drive that efficacy. So today though we have not seen that resonate outside of publications.

Nicholas Rubino -- Stifel -- Analyst

Perfect. Thank you very much.

Operator

And our next question is from Vamil Divan of Mizuho. Your line is open.

Vamil Divan -- Mizuho Securities -- Analyst

Great, thanks so much for taking the questions and the details you provide us a far. So maybe one around the around vaccine. Just in terms of the EIR [Phonetic], can you give any clarity around that specifically was it sort of specified as a voluntary action indicated or official action indicator or anything sort of more in terms of what you saw there and then maybe just a couple of quick kind of clarifications from I guess for Toby just as you sort of thinking about your cash position and in some of the changes you're making. Can you just talk about how that impacts the Viatris collaboration in terms of spend there. And then just in terms of sort of SG&A, R&D, sort of, I don't know if you can provide any sort of run rate that we should think about for fourth quarter or maybe for the first couple of quarters of next year. As we have to our model is just in terms of and how that might be impacted by these efforts you're making. Thank you.

Mark Foley -- President & Chief Executive Officer

Hello, this is Mark by the first. And Toby take your second question. So in terms of more clarity on the EIR [Phonetic]. Again, we understand the desire or more information. But, and we, yes, I think you back we feel really good about responses that we provided to the observations in the 483 [Phonetic]. We believe that we've got data, additional information that we need to refine parts I think need your question, we're not going to be commenting on additional specifics. And so we get the Type A meeting with the agency to make sure that, again, we've got more clarity on what's going to be going forward.

Tobin Schilke -- Chief Financial Officer

And then, with regards to your question around Viatris. Again, we continue to believe in that collaboration and that partnership that we have, we had a successful player to Type II meeting that provided clarity on what is needed to conduct a successful clinical trial for the biosimilar BOTOX. So, we will continue to invest alongside Viatris. Recall the debt on R&D collaboration is a 50.50 cost share going forward. Then your third question was on the mix of fourth quarter spending and sort of projected run rates going forward for opex. I think there will be a little bit of puts and takes as we approach the fourth quarter, sort of where we are for the full year. Just given that there will still be we had anticipated a little bit more capitalization sort of the manufacturing costs for the inventory reduction of DAXI. However that will be offset by less SG&A sort of through the launch of the peri launch for DAXI that makes sense.

And then, the cash preservation initiatives that we are hiring are underway to extend our cash runway, just to guide you to our Form 10-Q that we filed today where we assessed that operating plan that we described in the prepared remarks. Again sort of our current financial resources and then there we concluded we have sufficient balance sheet resources to fund our operations for at least 12 months filing platform. Thank you.

Vamil Divan -- Mizuho Securities -- Analyst

Okay, thank you.

Mark Foley -- President & Chief Executive Officer

Thanks.

Operator

[Operator Instructions] And we have a question from Tim Lugo of William Blair. Your line is open.

Timothy Lugo -- William Blair & Company -- Analyst

Thanks for taking my question. Now that you've had RHA out there for a year. And I know we're all hoping for a relatively quick resolution with the agency around DAXI but how do you gain planning 2022 if DAXI is not on the market for the whole year and how should the street kind of expect to see RHA and I guess also OPUL sequentially grow throughout the next few quarters or is it to the extent we're just waiting for the DAXI and the halo effect that will come when DAXI is approved.

Mark Foley -- President & Chief Executive Officer

Yes, Tim. So first off on RHA, again, if you look at our commercial infrastructure in the people that we have a different strategy, the dollars that we're supporting that brand, we feel like we continue to drive adoption independent of vaccine. And if you look at sort of the success that we've had to date, and the commentary we made earlier about back we're still largely are pretty thinly penetrated into our target market. The fact that our key during focused on it. The fact that we expect RHA wanted to come online here. We continue to like how we're positioned in the market and the ability to continue to drive penetration. And again same with our OPUL2 we just recently integrated the payback functionality in there, which will start to allow us to turn on additional features.

And so, we continue to think that both of these can stand on their own. It's obviously premature to speculate sort of what that runway looks like. Independent of our neuromodulator and that's why I think once we have clarity from the agency around the Type A will be in a better position to sort of talk about what the with the rapid growth from, it looks like, I don't know, Dustin, if you want to add anything on that.

Dustin Sjuts -- Chief Commercial Officer of Aesthetics & Therapeutics

I think we feel really good. The market is continuing to grow. We've been purposeful about building a standing value proposition for the unique characteristics of RHA, because you didn't see us coming out with pricing programs coupon others that are artificially driving demand based off price. People are choosing to buy RHA because the technology is different than what they have their practices today and our strategy for rent Aesthetics different what they're getting from other manufacturers that doesn't change without DAXI. Of course, with what DAXI we and we look forward to having as quickly as possible. We feel very good about the strength of our RHA, OPUL agnostic to DAXI.

Timothy Lugo -- William Blair & Company -- Analyst

Great to hear. And is there any update with your partnership with DAXI and I know that day. So in the, on obviously the faster extremely weak since the CRL. Is there, what kind of, I guess was just a general status of the relationship. And is there, are there any kind of triggers around share price. So could be it could impact the relationship.

Mark Foley -- President & Chief Executive Officer

Yes. No, they -- the upfront sort of stock grant that we made was part of the overall distribution that we had, which was a 10-year deal in the US with the ability to extend it for 2 when you're periods up a total of 12. There are minimums in there around for revenue in spend, but they've been a great partner. We continue to do really good about how we're performing in the marketplace. So be if anything, given the neuromodulator we're able to focus more resources and focus on building the brand, which over time we think will benefit us in terms of a larger account base once we also to get our neuromodulator approved but relationship continues to be really strong and there's nothing related to the equity from a relationship perspective.

Timothy Lugo -- William Blair & Company -- Analyst

Okay, great to hear. Thank you for the questions.

Operator

Thank you. And there are no further questions at this time, I will now turn the call over back to Mark Foley, Chief Executive Officer for his closing remarks.

Mark Foley -- President & Chief Executive Officer

Thank you, operator. In the coming months, we plan to virtually attend to Stifel and Piper Sandler Healthcare Conferences. We'll all requests for meetings at these events or directly through us. Please feel to reach out Jessica, if you'd like to schedule some time.

With that, I would like to thank all of you for participating in today's call.

Operator

[Operator Closing Remarks]

Duration: 45 minutes

Call participants:

Jessica Serra -- Head of Investor Relations

Mark Foley -- President & Chief Executive Officer

Dustin Sjuts -- Chief Commercial Officer of Aesthetics & Therapeutics

Tobin Schilke -- Chief Financial Officer

Kenneth Cacciatore -- Cowen & Company -- Analyst

David Amsellem -- Piper Sandler -- Analyst

Seamus Fernandez -- Guggenheim Securities -- Analyst

Nicholas Rubino -- Stifel -- Analyst

Vamil Divan -- Mizuho Securities -- Analyst

Timothy Lugo -- William Blair & Company -- Analyst

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