VTRS - Revance Therapeutics: PDUFA Catalyst 2023 And Increased Revenues

2023-07-03 15:50:36 ET

Summary

• FDA approval of Revance Therapeutics, Inc.'s DAXXIFY for glabellar lines in the U.S. achieved; Initial launch brought in revenues of $15.4 million.
• A supplemental Biologics Licensing Application of DAXXIFY for adults with cervical dystonia has been accepted by the FDA, with a PDUFA date set for August 19, 2023.
• A Biologics Licensing Application of DAXXIFY for glabellar lines in China region was submitted by its partner Fosun Pharma and accepted by the NPMA on April 13, 2023.
• Revenues for the first quarter ending March 31, 2023, were $49.3 million, which was a year-over-year growth increase of 95.3%.

Revance Therapeutics, Inc. ( RVNC ) is a good speculative biotech play to look into. The reason why I state that is because it is going to have a major catalyst for investors to look forward to in the coming months. What I'm talking about is that this biotech submitted a supplemental Biologics Licensing Application [sBLA] to the FDA for its drug DAXXIFY [DaxibotulinumtoxinA-lanm] as an injection for the treatment of patients with cervical dystonia. A PDUFA date has been established for August 19, 2023, whereby the FDA will decide if this drug should be approved to treat this patient population.

Another reason to look at this biotech is because it has been able to see growth in its most recent earnings report with respect to the use of its drug DAXXIFY as an injection for glabellar lines, plus its RHA Collection of dermal fillers. Speaking of DAXXIFY for glabellar lines, the last time I mentioned this biotech it had not received FDA approval of this drug for this indication. Now, it has this FDA approval under its belt.

Not only that, but Revance Therapeutics, Inc. might even be able to expand its sales for DAXXIFY if it can receive regulatory approval for its sBLA of this drug targeting adult patients with cervical dystonia. With FDA approval of DAXXIFY for glabellar lines achieved, plus the potential to expand sales of this drug towards adults with cervical dystonia with the submitted sBLA, these are the reasons why I believe that Revance Therapeutics is a good speculative biotech play to look into.

Supplemental Biologics Licensing Application Of DAXXIFY For The Treatment Of Patients With Cervical Dystonia

As I stated above in the beginning of this article, Revance Therapeutics was able to receive FDA approval of DAXXIFY for the treatment of patients with moderate-to-severe frown lines, or glabellar lines, in adults. However, this isn't the only positive development which has been achieved since the last time I wrote an article on this biotech. Since then, it has submitted and the FDA has accepted the supplemental Biologics Licensing Application [sBLA] of DAXXIFY for the treatment of adults with cervical dystonia.

Cervical dystonia is a painful condition whereby a person's neck muscles contract involuntarily, causing their head to uncontrollably tilt forward or backward. This disorder is highly important to treat, because it has a great impact on quality of life for a person. A patient who has this may have difficulty performing tasks and may even be affected in terms of employment opportunities as well. A Prescription Drug User Fee Act [PDUFA] date of August 19, 2023 has been established, whereby the FDA will decide upon whether or not DAXXIFY should be approved to treat this specific patient population.

The reason for the sBLA filing of DAXXIFY was thanks to positive results from the ASPEN program with phase 3 studies. Cervical dystonia patients who received both the 125 and 250-unit dose groups of DAXXIFY were able to meet on the primary endpoint . The primary endpoint utilized something known as the Toronto Western Spasmodic Torticollis Rating Scale [TWSTRS]. The drug was compared to placebo with respect to this TWSTRS scale. This scale is important for patients with cervical dystonia because it has three subscales, which are as follows:

• Diability
• Pain
• Severity.

Patients who took the 125 dose units of DAXXIFY beat placebo with respect to this TWSTRS scale with statistical significance with a p-value of p<.001 [12.7 point improvement on scale]. Patients who took the 250 unit dose of DAXXIFY beat placebo with respect to the TWSTRS scale with statistical significance with a p-value of p=.0006 [10.9 point improvement on scale]. The 12.7 and 10.9-point improvements greatly overshadow what was achieved with patients who only took placebo. Cervical dystonia patients who took placebo had only improved by 4.3 points on this TWSTRS scale.

The ability for Revance Therapeutics to move towards muscle movement disorders is a highly positive thing, especially when you consider the market opportunity. It is said that the cervical dystonia market opportunity in the United States alone could be as much as $345 million. However, the global market opportunity could be even better. It is said that as of 2022, the global Botulinum Toxin market for cervical dystonia was $470 million.

The positive to note here is that this is another target indication where it could move to in order to build up its revenues of DAXXIFY. Not only can the long acting DAXXIFY have a chance at becoming the new standard of care [SOC] for adults with cervical dystonia, but it might even provide for reduced frequency of injections by as much as 50%.

Financials

According to the 10-Q SEC Filing , Revance Therapeutics had cash, cash equivalents and short-term investments of $273.9 million as of March 31, 2023. If you think about it, this pharmaceutical company is doing great. The reason why I state that is because for the first quarter ending March 31, 2023 it was able to achieve revenues of $49.3 million . This may not seem like much, but it actually is, especially when you consider that Q1 revenue for the prior year only stood at $25.3 million. Thus, Q1 2023 revenues grew year-over-year by 95.3%. The reason for such a large growth achieved is because this company has two angles it is working at. That is, it achieved huge growth with its RHA collection of dermal fillers and initial revenue from DAXXIFY targeting patients with glabellar lines.

For instance, Q1 RHA collection revenues grew to $30.3 million, which was a year-over-year increase of 45.3%. Q1 DAXXIFY revenue started off at $15.4 million, which is not too bad considering that the drug launched into the market in late March. With respect to how well DAXXIFY will ultimately do in the glabellar lines market, it will be important to see how it trends with respect to sales in the coming quarters. If anything, sBLA approval of DAXXIFY for adults with cervical dystonia will only serve to help boost revenues. This is not the only expansion opportunity.

A Biologics Licensing Application [BLA] submission of DAXXIFY for injection of glabellar lines was submitted by partner Fosun Pharma and accepted for review by China's National Medical Products Administration [NMPA] . Thus, the ability to launch this drug for use of this patient population in China is also going to be important. That's because China is the 2nd largest market for neuromodulators, with a $741 million market opportunity and compound annual growth rate [CAGR] of 8.5%.

The company is funded for the moment, but it might need to find a way to raise capital in the coming months. The reason why I state that is because it believes it should have sufficient capital to fund its operations for at least the next 12 months following the filing of the 10-Q SEC Filing, which was filed on May 9, 2023. This estimate includes the potential to draw upon the Second Tranche of $100 million under the Note Purchase Agreement. It can also enact a cash raise another way, which is to sell up to $150 million of its common stock under a 2022 ATM agreement.

Risks To Business

There are several risks that traders/investors should be aware of before investing in Revance Therapeutics. The first risk to consider would be with respect to DAXXIFY sales for glabellar lines in the United States. Thus far, sales of this drug for this indication are not off to a bad start at $15.4 million. However, it will be important to see if sales of DAXXIFY start to ramp up in the coming quarters.

A second risk to consider would be with respect to the sBLA of DAXXIFY for the treatment of adults with cervical dystonia. A PDUFA date has been established for August 19, 2023 and there is no guarantee that the FDA will approve this drug for this specific patient population.

A third risk to consider would be with respect to the BLA submission of DAXXIFY for glabellar lines by its partner Fosun Pharma to China's National Medical Products Administration [NMPA]. Even though the BLA submission was accepted, there is no guarantee that DAXXIFY will be approved for this territory.

A fourth risk to consider would be with respect to the RHA Collection of dermal fillers from Revance. That's because even though revenues for this segment are strong now, with a year-over-year increase in revenues of 45.3% to $30.3 million, there is no guarantee that such revenue growth will continue in the coming quarters.

A final risk to consider would be with respect to the two ongoing lawsuits. One lawsuit is with Allergan filing against a manufacturing source of DAXXIFY in October 2021 for patents. The latest progress on this is that Revance filed and an answer and counterclaims to Allergan's second amended complaint on January 20, 2023. Then on March 3, 2023, it filed invalidity contentions, which challenge Allergan's asserted patents.

The second lawsuit was filed on December 10, 2021 and is a putative securities class action complaint against Revance and certain officers on behalf of a class of stockholders who acquired the Company's securities from November 25, 2019 to October 11, 2021. The latest action listed in the 10-Q SEC filing on this matter, is that a hearing on the motion to dismiss the lawsuit against it was to be held on June 29, 2023.

Conclusion

The final conclusion is that Revance Therapeutics is a good speculative biotech play to look into. The reason why I state that is because it has been able to achieve FDA approval of DAXXIFY for the treatment of adults with glabellar lines, since the last time I wrote about this biotech. Not only that, but it has potential to expand upon approval of this drug with its sBLA it filed to the FDA. Such an sBLA of DAXXIFY will be for the treatment of adults with cervical dystonia, with a PDUFA date established for August 19, 2023. It has made other progress since then, such as getting its partner Fosun Pharma to submit a BLA of DAXXIFY of glabellar lines for potential approval in the China region.

Another positive thing about Revance is that it had made a partnership with Viatris Inc. ( VTRS ) to develop a biosimilar to BOTOX. The reason why, is so that Revance can possibly capture the existing short-acting neuromodulator market. A biosimilar to BOTOX could help it target 15 approved BOTOX indications, which would be a $5.3 billion global market opportunity. With FDA approval of DAXXIFY for glabellar lines achieved, plus the potential to expand sales of this drug towards adults with cervical dystonia with the submitted sBLA, these are the reasons why I believe that Revance Therapeutics is a good speculative biotech play to look into.

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