Aegis Capital Starts Revance Therapeutic (RVNC) at Buy; Likes Botulinum Opportunity
This is from November 2016 but I thought it was worth sharing.
Aegis Capital assumes coverage on Revance Therapeutics (Nasdaq: RVNC) with a Buy rating and $28 price target.
Analyst Difei Yang noted the following with today's initiation:
Opportunity to tap into a large Botulinum toxin market. Botulinum toxin is currently a $3B market, set to reach $5.6B by 2020. Though it is largely a concentrated market, with Botox holding ~85% of the market share, we believe that RT002 will stand out from primary competitors, Xeomin and Dysport, mostly because RT002 targets selective sites to limit spread to other regions and will be the first long acting toxin. We believe that RT002 can attain glabellar line market share of 21% by 2025, if on-going phase III trials is able to reproduce similar results as in the phase II BELMONT study. We estimate about $569 mil in US based revenues for FY 2025 across indications of glabellar lines, plantar fasciitis, and cervical dystonia.
Laser focus on the development of Daxibotulinumtoxin A for Injection (RT002). Management's goal of bringing an improved version of Botox to market continues to remain evident. The program is split across three indications for glabellar lines, cervical dystonia (CD), and plantar fasciitis (PF). Glabellar lines is the largest market of the three indications, and is largely dominated by Botox and dermal fillers such as Restylane and Juvederm Voluma. Within the indication for CD, RT002 is expected to compete directly with Botox and Dysport, and indirectly with oral treatments such as Anticholinergics. Lastly, RT002 is being evaluated for potential treatment of PF, a market for which injectables such a corticosteroids are the first line of treatment. Botox injections are gaining popularity, albeit off label, among podiatrists as studies are showing superiority to traditional intralesional steroid injections. RT-002 could be the first one to gain an FDA approved indication.
Upcoming catalysts. With RT002 being investigated across multiple indications, Revance has a number of potential catalytic events lined up that currently culminate in 4Q17. 1) Interim safety, efficacy, and duration results from the first two cohorts of the phase II trial in CD expected before year end 2016. 2) Top-line phase II readout from CD expected in 2017. 3) Top-line phase II readout from PF expected in 2017. 4) Top-line results from both pivotal phase III trials in glabellar lines expected in 4Q17.
