RVL Pharmaceuticals plc (NASDAQ:RVLP) Q4 2022 Earnings Call Transcript

Brian Markison: Yes, and I think that’s a fair question, Doug. Good morning. You know, the way we’re looking at it is the change in our accounting or our revenue methodology is, as I said in the prepared remarks, it’s based on firm, unconditional orders, so it’s real sales. Again, and we’ll be following up with everyone after the call to help in the refinement of modeling conversations, but I think it’s fair to say that we will ramp in a similar manner to last year because right now in this quarter, we’re heavily focused on the reorder customer and making sure that we get traction, because we don’t want to end up sort of six months down the road from now and many people haven’t really worked it into their practice, so that’s really important for us. I think JD, if you wouldn’t mind, add a little more color if you could.

JD Schaub: Yes, and good morning Doug. I don’t think the change in revenue recognition is something that we view as impacting revenue growth and opportunity. The way I would look at Q4 to Q1, given some of the shift, is probably–obviously we now expect a little bit better revenue performance in Q1 than we otherwise would have. I think traditionally, there is a bit of a drop-off from Q4 to Q1. I think we would expect it to be significantly less with our business because of the revenue change. Then importantly, Doug, we look at the business, the make-up of the revenue is a keen area of focus for us; in other words, the stickiness of revenue is one of the things we pay closest attention to in terms of the health and forward-looking opportunity, and I think that’s where this business is going to continue to drive as we move through the rest of this year.

We could definitely go out and continue to meaningfully expand points of sale, but as a new category, despite receptivity, we know that’s not going to be something that becomes sustainable. We’ve got to help these practices take to the product and integrate it in a way that fits within each practice, and that’s going to be the focus and how we drive this business moving forward.

Douglas Tsao: But I guess the question that I think I’ve gotten and am trying to understand is how should we think about the performance and measure progress from Q3 to Q4 in the context of the shift, because obviously before it was easy – we could say, okay, revenues were up 20% sequentially. The question I’ve gotten now is revenue looked flat, so we get the 1Q but how do we feel confident about the overall trajectory in the context of what on the surface looks like flattening? Thank you.

Brian Markison: Yes Doug, I get it, and on the surface with the change in how we’re recording revenue, yes, it would look flat. But those orders were in the fourth quarter, those sales occurred in the fourth quarter and now they’re being simply recorded in Q1, and again we’ll be more forthcoming later on the revenue trajectory. But the other thing to keep in mind is we’re in a number of important business development conversations and any one of those are likely to have an impact on the near term future, so we don’t want to get over our skis. We like what we’re seeing, we’re going to be out later on with more information to help in the modeling, but again as I mentioned to Louise, I think our revenue trajectory will look similar to how it did last year in growth, but again in the first quarter, we’re going to be careful because we are driving that reorder business and we want to be mindful of that, because we’re not spending nearly as much as what the consensus would have out there because we have no competition, so there’s no need for us to worry about bundled rebates to physician practices with this product, so we are developing leverage within the P&L so we can grow consistently and carefully.