• Intro
  • Universe
  • Business Overview - Allergan/AbbVie ($ABBV) & Evolus ($EOLS)
  • Bulls
  • Bears
  • Key Metrics - ($ABBV & $EOLS)
  • Conclusion


Everyone can spot it in a crowd or can they?

Lips that look (slightly) bigger than what your momma gave you. No wrinkles and clean skin at 45 years old. Cheeks that don't move when you smile.

We all know it – BOTOX, BABY!

With the rise of Instagram influencers and the need to make your social media “self” your “true self” – Botox has seen a huge rise in popularity. Everyone wants to fix that one piece of their face. We all want to look just a little more perfect… if we could just tweak this one thing…

We know it’s there – but is this a trend we can invest in? Do we have a way to profit from the continued rise of social media influencers, look alikes and profit centers?

Let’s dive into medical treatment companies and see if we can find one that fits the bill!


Facial Injection, believe it or not, is an industry with a market value north of $17.4 billion. It is expected to continue growing from here at an annual growth rate of 9.1% through 2030.

The rise of social media fame has driven demand for these products straight up. Not only do followers want to do the same things as their favorite TikTokers, but they want to use the same products as them and look as good as they do.

The pandemic only made us more conscious, with us staring at our face on Zoom all day long.

Botox, a drug created from the toxin Botulin, is used medically to treat muscular conditions and to cosmetically remove wrinkles (by temporarily paralyzing facial muscles).

Botox was created by Allergan Aesthetics in 1989 and approved by the FDA for therapeutic use. In 2002 it was approved by the FDA for cosmetic treatments:

Since Allergan Aesthetics created the Botox name and brand, it makes sense to look closer at their business and where it stands today. But, Allergan was acquired by AbbVie in 2019 so we will look at both companies here.

AbbVie is a broad pharma-giant, with many more lines of business than just Botox, but we will try to parse out the pieces that matter here while being aware of the overall business.

As with any industry, sometimes the new entrants provide a compelling and interesting story worth investigating further. Evolus is that new player. 

Their focus is 100% on the facial injection aesthetic market. They are going all in on the millennial female aesthetic market. They saw what was happening in the social media space and have been growing immensely since formation in 2019.

We have two ways to dive into the Botox industry, so let’s dive in to Allergan (AbbVie now) and Evolus ($EOLS).

Business Overview - Allergan/AbbVie ($ABBV) & Evolus ($EOLS)

Allergan, like any and all pharmaceutical companies that have success, does more than just Botox treatment and therapy. In fact, Allergan had four main areas of focus within the medical space: 1) medical aesthetics (botox), 2) eye care, 3) central nervous system and 4) gastroenterology.

The risk of focusing all the business efforts on one product that must go through years and years of research and testing is too high for most major players in this space. The fact that Allergan has multiple areas of focus is definitely a solid approach here and what would have led them to have a large portfolio of procedures, drugs, therapies.

Below is their full offering of brands and medications:

<The Risk Factors section of any pharmaceutical company’s 10K/Q is enough to make any investor cry. The list of potential issues is immense, especially for a company operating in multiple countries with multiple regulatory issues surrounding medication, therapy and procedures.>

2 out of 18 product lines are related to Botox therapy or aesthetic procedures. Looking closer, approximately $7bn of Allergan’s $16bn in revenue comes from specialized therapeutics. And within that, 50% of that revenue comes from Botox treatments – whether cosmetic or therapeutic.

So, even though Botox was only 11% of the product offering from Allergan, it accounted for 25% of their annual revenue. In other words, it was an important factor in their business, to say the least.

In 2019, AbbVie acquired Allergan Aesthetics for $63 billion, in the form of AbbVie stock and cash, totaling $188.24 per share after trading around $130 in the months leading up to the announcement.

Botox cosmetic sales now make up 3.9% of AbbVie total sales annually (2.2bn on 56bn in sales) and Botox therapeutic sales make up 4.3% (2.4bn on 56bn of sales) for a combined 8.2% of total sales per year.

AbbVie’s main driver for acquiring Allergan was a diversification bet – the majority of AbbVie’s revenue is derived from one drug, Humira. They were not necessarily going after the Botox industry specifically, but boy did they get a winner there.

Now contrast this diversified, broad approach to pharmaceuticals from AbbVie to Evolus, a new pharmaceutical company with a singular focus. They have one market, one product and one approach. 100% of their revenue is derived from their product, similar to Botox, called Jeuveau.

Jeuveau was approved by the FDA in 2019 for use in reducing forehead wrinkles. In fact, it is an eerily similar product to Botox. If you look closely, a few key players from Allergan helped in the creation of Evolus.

Jeuveau also contains the same active ingredient as Botox.

What’s incredible is that in blind studies and based on customer surveys, customers either cannot tell the difference between the two products, or prefer Jeuveau over Botox.

But $EOLS appears to be doing something that does not match the broader pharmaceuticals industry – they are marketing and targeting their demographics in a perfect manner: advertising where their market spends their time. Social Media and streaming services. And, they have created a loyalty program that helps drive repeat customers. Joining the loyalty program gets new customers $40 off their first treatment. 

Even though treatment is provided by a medical professional, getting a “manufacturer’s coupon” is always a good plan.



The market for facial injections is growing at a surprising rate and Botox is at the top of the list for products set to benefit from that growth.

Already historically growing at roughly 9% per year, Botox is expected to dominate the market and separate itself even further by 2030.

Along with this growth, AbbVie is well positioned to benefit from growth in other sectors, even as demand for their flagship drug, Humira, starts to wane. Botox is still a leader in the facial aesthetic injection market and is well-positioned to outlast and outgrow competitors that are popping up.

So far, $EOLS appears to be making all the right bets. Their revenue has increased 177% in Q1 2022 vs 2021. They still have losses on a net income basis, but they appear to be trending in the right direction – in fact, lining up well with the growth trajectory of the facial injection market as a whole.

Based on their financials, $EOLS is well positioned to continue down the path of development with their offering, sitting on just over $100 million of cash and burning approximately $17.5 million per quarter. This should give them enough runway to continue in their growth towards profitability.

At the current rate of growth they are experiencing, they expect to see a YoY total revenue growth for 2022 near 50% and while maintaining a gross profit margin of 58-61% for the year. This growth does not include their planned expansion into international markets.

They have a rosy outcome for 2022, but expecting profitability within the next 1-2 years will be mainly driven by their ability to continue hitting sales growth targets.


Over the last 5 years of Allergan’s life as a separate company before being acquired by AbbVie, the return on investment was… not good. To say the least.

In fact, an investor who put $100 into Allergan in early 2014, would have only ended up with $100 after Allergan was acquired by AbbVie. Looking at that 0% return over a 6 year period would normally not be the worst thing, especially when compared to 2022’s market turmoil.

But look closer at what the market returned during that time period. The chart above, from Allergan’s final 10-K, highlights the stark difference in ending value from a visual perspective. But let’s put that $100 invested in early 2014 in the S&P 500 and see what number it spits out at the acquisition date of Allergan:


The downside for AbbVie acquiring Allergan as well is the immense amount of debt that was necessary to fund the merger. AbbVie has historically been a cash generating business, but with the majority of their profit margin coming from Humira, they may end up in a tough position with all of this additional debt once the patent for their cash cow, Humira, expires in 2023.

<Generic pharmaceuticals will be able to muscle their way into this market and undercut AbbVie’s profit margin once the patent expires>

Humira represents 40% of AbbVie’s revenue and 50% of its profit margin. The exposure to Botox within this company is relatively small and the broader product lineup may cause greater stress on the business, even as Botox is expected to grow over the next 10 years.

$EOLS has also struggled since going public in 2018. In fact, their stock has been relatively flat over the last 4 years. Even with great growth and future potential, the market understands that a 1 trick pony is a tricky bet and entails much more risk than many are willing to accept.

If you remember earlier we noted that Jeuveau and Botox share the same active ingredient. Well, Allergan picked up on that right away and sued Evolus in 2019. Evolus had to shut down sales for one quarter while fighting that legal battle. 

Ultimately, they were allowed to continue producing and selling their product, but only after paying Allergan and MedyTox a cool $35 million.

Oh… and ongoing royalties. 

This is the most recent update from $EOLS on the royalty payment from their May 2022 earnings call:

As a reminder, in mid-September, our settlement royalty obligations to AbbVie will end. Also at that time, our settlement royalty obligations to Medytox will decrease significantly to a mid-single-digit royalty on global net sales. These changes are expected to dramatically lift our fourth quarter adjusted gross margin to the range of 68% to 71%.

This will continue to be a drag on $EOLS as they progress towards profitability.

$EOLS is also a much younger company, and much smaller, than the entrenched and ancient giant that is $ABBV. While they are gaining some market share with their singular focus, there is still immense risk on this market, their product, and their bets, playing out the way they think. One misstep in the trial phase, or one hiccup, and they may be knocked off their pedestal very quickly.

Key Metrics (as of 7/27/22)


  • Current Price: $149.43
  • 2021 Sales: $56.2 Billion
  • 2021 Net Income: $11.5 Billion
  • Net Income Margin: 20.46%
  • NTM Metrics:
    • EV/Sales: 5.6x
    • Price/Sales: 4.5x
    • EV/EBITDA: 10.6x
    • Price/Earnings: 10.9x
    • Price/Free Cash Flow: 11.4x
  • Price/Book: 16.6x
  • Total Cash: $7.57bn
  • Total LT Debt: $63.5bn


  • Current Price: $12.10
  • 2021 Sales: $99.673 Million
  • 2021 Net Income: ($46.81 Million)
  • Net Income Margin: -46%
  • NTM Metrics:
    • EV/Sales: 4.2x
    • Price/Sales: 4.5x
    • Price/Earnings: NA
  • Price/Book: 4.4x
  • Total Cash: $106m
  • Total LT Debt: $73.4m


The Facial Injection market is already hitting above its weight class, but with the expected growth over the next 10 years – it is definitely an area to consider making a strategic bet for investment.

There are definitely a multitude of options out there, but between the two we highlighted today there are essentially two paths available:

  1. The “easy” road – investment in AbbVie carries with it broad exposure to the pharmaceutical market and a hefty 3.8% dividend yield. This is the play for the investor looking for exposure, but not making a direct and targeted bet on any one space. The array of drugs in AbbVie’s portfolio provides room for growth, along with some safety from differing levels of sales and usage. This is the standard approach.
  2. The “riskier” road – investment in Evolus. A newer, highly focused company that is targeting this space directly. They understand the growth potential. They understand the market. And they understand who they need to be in order to drive sales growth. So far, they have been successful. They have areas of opportunity for growth and expansion. But all their eggs are in one basket. Is that a risk you are willing to make?

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