Revance Therapeutics Inc (RVNC)

[dewophile]

Why can’t they raise prices as therapeutics comes online to levels that are still acceptable to payers (especially if duration Pam’s out saving md visits etc) and then just provide coupons to spas etc and take a modest hot to aesthetics share (but maintain especially if duration pans out for a certain percentage of patients )

[iwfal]

The key questions we should ask are whether the initial blew up is a 4 billions plus mistake?

That was the point of my post. By eschewing the Allergan strategy of, effectively, having separate prices for aesthetics and therapeutic, they (effectively) shrunk the therapeutic market in a way that isn’t reversible. Similarly, by eschewing all the tools usually used in aesthetics (eg coupons), and rolling out before they had a method to transmit to injectors a method to get longer duration for areas outside Glabellar, they forced themselves to have to cut prices to below the rest of market - again shrinking total future revenue size (in aesthetics this time).

2 years ago it was reasonable to assume that when Revance took over the US market (say 80% of everything but migraine) that meant their revenues would be Botox extrapolated out along historical Botox price hikes of almost 10% per year. But now that’s effectively impossible… they will max out at perhaps 50% of that. And it will take an extra 2 years to get there - so an additional NPV discount hit today. All told that’s a huge hit to current share price even before accounting for market doubt of Revance mgt.

[alertmeipp]

The key questions we should ask are whether the initial blew up is a 4 billions plus mistake?

And whether that causes permanent damage to Daxxify potential.

For me, it’s golden opportunity BUT I got suck in a lot higher

[boraborak38]

That’s the bullish way of looking at it. They blew their best chance. Now it’s crawling their way back and TBD how long it’ll take.

[alertmeipp]

Good point. I think both reorder revenue and number of reorder accounts are important

If reorder account is great but revenue is low, it also could mean issues

[alertmeipp]

It’s actually not a bad thing if your shorting stats are correct.

Usually this means a much faster re-rate when good news finally hit.

We have couple good news that can hit any time

[mrwilson31]

I bought into Bluebio Jan ‘24.
Some of these are just buy and holds.

Viking is another one with promise.

[vinmantoo]

Actually- Vertex, AbbVie, BlueBio, Mimdex,

Wow, BlueBio was $77 in 2019 and is now just over $1. That must have hurt. Mimdex doens't seem to be much.

[vinmantoo]

Not easy to get those burned accounts back. Last Q conf call talked about that. And it’s a small community so word gets around. Even the ones that didn’t get burned know the ones that did and dont like how things played out.

If the community is small and word gets around, it also means successes get around. Patients and practices will hear that Daxxify is a superior product and want to use it.

[edcoolidge]

You've just explained the "CosmeticMD effect." Keeping patients away from the best product on the market for reasons that have nothing to do with the product. That can only go on for so long.

[iwfal]

Not easy to get those burned accounts back. Last Q conf call talked about that.

Yes, I know they talked about it altho it to an analyst question w explicit terminology (‘account repair’ IIRC) to really highlight that they think of it the same way internally, but try to soft peddle it.

And, yes, I know it’s hard. Hence my interest in the metric I just explained. But my guess is that altho mgt knows some variant of this by-account metric… they aren’t going to publicize it. Instead they’ll stick to the ‘reorder revenues’ metric alone bc it looks better.

That said, once price competition kicks in via advertising by injectors, I’d expect reluctant accounts to start looking again. The question is how long that process takes. I don’t expect it to be fast.

[boraborak38]

Not easy to get those burned accounts back. Last Q conf call talked about that. And it’s a small community so word gets around. Even the ones that didn’t get burned know the ones that did and dont like how things played out.

[Emannow]

Every morning the shorts sell between 14,000 and 30,000 shares at the open in an effort to drive the price down. Yesterday, 62% of the shares traded were shorts. The shorts will continue to drive the price down day after day as long as Mark Foley keeps his head up Angus Russell's butt. Mark Foley has NOT made a positive announcement is almost 12 months...All Foley does is announces how he is fixing his previous bad decisions which he did not realize where being made....Mark Foley's strategy is to SUPRISE the investment community with sales info and completely lacks any communication skills...that is why Investors have lost trust in him and continue to see Foley a a lose cannon! Rather than provide positive announcements on development (like Evolus and manage the investment community) Mark Foley has this "ego edge" which is why RVNC was arrogant and obnoxious! Where is the announcement for the new indication for Lips for RH3...Lips are now the #1 dermal filler injection area.....Allergan would be all over this new indication with press releases....Foley has his head up his butt. Dew, Foley is a trainwreck!

Jessica most likely left because she could not take the bad decisions of Foley!

[iwfal]

our growth will come from a combination of new account adds, along with ongoing reorders. And as we noted in Q4, more than 2/3 of our revenue came from reordering accounts, which I think points to the stickiness of the product in those accounts where we’re able to secure. So we feel very good about where we are"

Yes, I am aware of this. And it’s VERY different than tracking by account. Tracking by revenue is currently likely about conversion of accounts from 10% Daxxy to 90% Daxxy as those accounts that stuck with Daxxy long enough to figure out how to use it can now maximize their revenue etc. Good for them.

But Revance’s big impediment to growth is going to be bringing in new or burned accounts in a serious way. Revance explicitly acknowledges this by, for instance, noting they had to spend 2 quarters repairing broken accounts. In order to understand success in this area it’s necessary to track reorder metrics by account (eg in period 2 quarters or 3 quarters after initial order, how many accounts do a bigger reorder), not revenue. Almost certainly management knows this… so it’s a little odd that they focus on revenue *only*.

[go seek]

Friday Flash Sale!
https://www.instagram.com/reel/C5Vy_0WrDSW/?igsh=dWdtaWZyZmtweXp2

[alertmeipp]

Remember how Mark Z was hated when Meta was going below $100...everyone said he was crazy and stupid. Can't build any product.
Now, Meta is at all time high. Guess what. Mark Z is still the CEO there. And now, people praise him like God-sent.

Price drives sentiment sometimes.

[alertmeipp]

Q4 - more than 2/3 of the revenue was from reorders.

"our growth will come from a combination of new account adds, along with ongoing reorders. And as we noted in Q4, more than 2/3 of our revenue came from reordering accounts, which I think points to the stickiness of the product in those accounts where we’re able to secure. So we feel very good about where we are"

[go seek]

Why buy @ $4.50 now when you could have bought for $15.00 just six months ago?! 🙃
Foley is not the problem. Better days are ahead. Control what you can control and leave the rest.

[alertmeipp]

lol you guys need to chill out about Foley.

If he is doing what you are suggesting and doing so so obviously , he would be out by now. He owns lots of shares here too.

No one in their right mind would pay 100mm to buy the secondary if Foley is so useless

[iwfal]

That though should get sorted out through real world experience over time

Yes. Over time. But the key question is how much time - and how does that compare to their fairly high expense rate. And in light of having a large number of early adopters now cynical about the benefits of Daxxy. Hence my *really* wanting to see what percent of accounts that ordered in first half of 2023 reordered in Q4? In 2024 Q1? That metric should provide early insight to a turn around - although I suspect that it was not a good looking number in Q4, and likely not yet much better.

Note: I suspect the biggest impetus to a getting disappointed injectors to re-order will be competition on price from injectors in their local area who've learned how to get the benefits of Daxxy. But that likely takes multiple quarters of price competition and the price competition just started this quarter. In the meantime Revance needs to bring down their costs.

[JesterJungle1]

Foley is not the only problem anymore. He’s brought a whole new crop of people who don’t know a thing about this business or how to turn it around. Not going to get better anytime soon because even if he is replaced his bad hires are not going anywhere.

[alertmeipp]

Interesting observations. Cant stop sellers from getting out at all cost though. I picked up some more shares today. Once the liquidation is done, stock will ramp back up. Fundamentally, the company is going to get stronger over next few quarters.

They are just starting to scratch the surface.

[alertmeipp]

Ask yourself this - would you pay $4.5 a share for $RVNC led by Foley. Foley isn't going away.

[edcoolidge]

Agreed. Foley is not to blame for all of Revance's problem. Overcoming the "CosmeticMD effect" was always going to be a challenge—particularly with a product that requires some intelligence to use properly. We'll see what happens in therapeutics where doctors are motivated to give their patients the best results rather than to lie to them to pad their own pockets.

[Tomdontworry]

Well, Evolus took their fair beating too back in the day. Went from high 20s to $3/sh and people made fun of David, the Allergan salesman with no CEO experience. Foley on the other hand sold his old business to Allergan for 2.5B. Foley made terrible decisions but he eventually corrects them. Did I vote to remove him via BOD? Yes, but that probably wont matter. Remember, both Evolus and Revence raised equity via stock offering days apart.

[edcoolidge]

I agree. I'm waiting for RVNC to hit $2 or Foley to be exited to buy more shares. I've made a lot of money over the years on RVNC and have a negative trade-adjusted cost basis. This may be another big opportunity—but I want more potential reward for taking on that risk, or for the risk (Foley) to be removed.

[Emannow]

Mark Foley's bad decisions and dishonesty in every area seems to be the central theme of RVNC. Great products (Daxi and RHA) and FAILED Foley leadership. The investment community realizes it is only a matter of time until Foley will make more bad decisions since he has no idea what he is doing. David Moatazedi worked for Allergan for many years and knows what works, what Allergan failed at and how to bring a product to market in a competitive environment. Mark Foley on the other hand, never worked in toxins, never brought a product to market in a completive environment and always claims he does not know what is going on. Which I am now coming to the realization, that he really did not know and still have no clue. As long as Foley leads, the SP will continue to drop. Blind leading the sheep... Maybe Foley makes the decision to wait a full year, to release Daxi for CD...needs 4 full cycles...RVNC needs LEADERSHIP!

[edcoolidge]

It's interesting that RVNC has attracted such intense attention from perpetual losers like CosmeticMD. What motivates the voraciousness of his lies about Daxxify? It takes a very sad and pathetic type of person to come onto an investing board to lie about being short the stock and lie about the product—unless of course that person has financial motivation to do so. It looks to me like some people are pretty afraid of Daxxify's potential.

[edcoolidge]

What is your insolvency scenario?

I don't have a specific scenario nor am I saying it's likely, but think about it like comorbidities: they're already weak—any new unseen setback could be the death knell.

[YY1000]

Rather run trials and get a label for frontalis

As you suggest that would take a lot of time and money. And without a trial, there is no data to publish on other areas.

again hindsight is 20/20 but they were dealing with a fundamentally new drug unlike evolus which is basically a botox biosimilar

Exactly. Revance did not handle this part well, and I think it is still one of their biggest problems. The information on how to inject properly other areas is now available if you know where to search, but most of the (small number of) doctors I speak to haven't done this... more like borak's reports rather than soma's. These MDs (who btw were part of Prevue and I think some participated in Sakura 3) get their information from conferences, publications etc rather than message boards, realself or social media. I don't know how representative that is, but it concerns me.

[vinmantoo]

If you think the difference is, say, get to 80% market share in non-migraine therapeutic in 4 years vs 8 years (and I doubt the lower price drive drives a halving of time constant) then it still doesn’t offset the 30% lower price *in perpetuity*. Reminders:

Why in the world do you bring up an 80% market share? I don't understand what you are saying as RVNC is currently at a far, far lower market share. If RVNC cut their Daxxify price by 30% then they need to increase their units sold by 40% to get back to even. For example, if 10 units were originally priced at $10/unit then they get $100. If they cut the price to $7/unit but sell 14 units at the lower price, then they get to $98, essentially the same. If they doubled their units sold after the price cut, then 20 units at $7/unit comes to $140, which is more than $100, right? Given that RVNC was at a low market share before the price cut, there is much room to grow, right?

A) the comparison is to the price curve Daxxy wld have charged in a strategic rollout more like what investors thought wld happen. And that includes routine Allergan-style price increases.

No it isn't. What people thought at the start of the Daxxify launch is irrelevant now. Investors are looking at what can happen with a better product now priced lower in a move to drive increased market share. Now you can certainly say/bet that increased market share may take longer or even never happen. I believe increased market share will happen and at a reasonable pace.

B) in perpetuity happens because most companies are not like Shkreli, They are like Allergan and feel limited in how much they can boost per year and Daxxy, like Allergan, is probably limited to near 10%. And wld have been similarly limited even in the better roll out.

A 10% price increase next year after RVNC has grabbed higher market share to match yet another Allergan price increase would be fine with me. However, if clients do prefer Daxxify over Botox then your assumption that RVNC can't increase prices down the road more than Allergan may be wrong.

[YY1000]

I expect Q1 to be very weak. ... Insolvency is definitely a growing risk

Wall Street is pretty good with channel checks, so I think you could be right about Q1. Almost I would rather have that be the explanation for the low SP rather than something more fundamental.

However I don't see insolvency as a major risk given the increasing success of their filler line. With the $3billion valuation I can understand (but don't agree with) the profligate spending... obvious to anyone that has been at functions in their Nashville HQ... Now they will have to seriously cut down on expenses, and the filler revenues should keep them alive even if Daxi takes a long time. What is your insolvency scenario?

[dewophile]

I was not suggesting they promote off label at all. Rather run trials and get a label for frontalis, or if that is too costly (money and time), at least get more data and publish it where injectors can learn what differences if any there might be for daxi in these other areas of the face
The presumption I am sure was that all these muscles (at least in the face) are comparable and it would not be worth the money and time to run them, but there was a hint that daxi may perform differently in different muscle groups from the CD trial where you didn't need double the botox dose for efficacy
again hindsight is 20/20 but they were dealing with a fundamentally new drug unlike evolus which is basically a botox biosimilar

[YY1000]

In hindsight not fleshing out the proper dosing and technique for other areas of the face was also a mistake - it sounds like many injectors knew what to do for glabella but not frontalis, lateral canthal, etc. which affected results

I do not believe RVNC could do that given that approval was only for glabella. Physicians like Soma who figured out the right way to inject other areas could share their protocols/methods in conference presentations, social media etc and I believe Revance should have done more to encourage that, but they would still need not to cross the FDA line... Tbh, given that this is definitely a challenge, I was disappointed that I saw nothing like that at the AAD conference in San Diego last month.

[edcoolidge]

I expect Q1 to be very weak. The consumer is obviously retrenching. Ironically this should help Daxxify sales since it's a better value to the patient than Botox—but unfortunately Daxxify still has a premium price attached to it by many injectors.

Interest rates are also likely to stay higher this year than many anticipated at the start of the year. Revance's challenged balance sheet and recent surprise dilution will keep RVNC hyper-sensitive to interest rates for the foreseeable future.

Taken together I wouldn't be surprised if we see RVNC at $2 in the next few months. Insolvency is definitely a growing risk especially if Foley keeps making mistakes but there are still many levers that can be pulled to avoid that.

All of that said, Daxxify is clearly the best toxin on the market. There's only so long that the mediocre CosmeticMDs can hide that from their patients. Even if another long acting toxin comes to market Daxxify should be able to take significant market share from Botox and the other lesser toxins. If Daxxify sales establish a solid growth trend then RVNC's share price will recover.

[alertmeipp]

Just picked up some more shares

It’s mind boggling that shares trade at 1/10 of the high after approval all because of a mess up rollout.

And the secondary is down 30 percent already without any news

[alertmeipp]

Current expectations for q1 is 53 to 59mm.

I think q3 and q4 would be the ones we should focus on anyways

[iwfal]

depends on how fast Daxxify gains market shares, doesn't it?

If you think the difference is, say, get to 80% market share in non-migraine therapeutic in 4 years vs 8 years (and I doubt the lower price drive drives a halving of time constant) then it still doesn’t offset the 30% lower price *in perpetuity*. Reminders:

A) the comparison is to the price curve Daxxy wld have charged in a strategic rollout more like what investors thought wld happen. And that includes routine Allergan-style price increases.

B) in perpetuity happens because most companies are not like Shkreli, They are like Allergan and feel limited in how much they can boost per year and Daxxy, like Allergan, is probably limited to near 10%. And wld have been similarly limited even in the better roll out.

[Emannow]

Always a good day when the stock market goes up and RVNC just stays the same! Mark
Foley is doing an amazing job! I am sure all of you saw the Corporate announcement for the New Lip Indications for RH3! What a great job Foley is doing communicating to the Investor community....Wall Street believes Foley. And the new Lip Indication for RHA3 is from the FDA....not something which Foley is just making up in his head!

[vinmantoo]

Sure, altho generally limited (eg bigger than 10% causes big scrutiny) and it’s a good bet they’d have done most of these kinds of raise regardless (eg like Allergan), so my point is that it will be a very long time, if ever, before they catch up to where they would have been.

The time frame for when/if RVNC raises prices depends on whether other companies raise their prices again and how well Daxxify is being received by clients/patients.

Yes, their rate of growth of market share will be somewhat faster, but that’s unlikely to be adequate to offset the big NPV hit from lower margins, lower price.

That depends on how fast Daxxify gains market shares, doesn't it?

[iwfal]

Don't companies raise prices at some point? I mean Allergan/ABBV just did that earlier in the year.

Sure, altho generally limited (eg bigger than 10% causes big scrutiny) and it’s a good bet they’d have done most of these kinds of raise regardless (eg like Allergan), so my point is that it will be a very long time, if ever, before they catch up to where they would have been. Yes, their rate of growth of market share will be somewhat faster, but that’s unlikely to be adequate to offset the big NPV hit from lower margins, lower price.

In the meantime… hopefully they do something to lower their expenses.

[vinmantoo]

But then they had to cut aesthetic prices and since it wasn’t decoupled … they eviscerated the pricing in therapeutics.

Don't companies raise prices at some point? I mean Allergan/ABBV just did that earlier in the year. Of course that won't happen until market share is rising and consumers/patients and physicians are happy with the results.

[dewophile]

In hindsight not fleshing out the proper dosing and technique for other areas of the face was also a mistake - it sounds like many injectors knew what to do for glabella but not frontalis, lateral canthal, etc. which affected results
That though should get sorted out through real world experience over time

[valiano]

Ulta Beauty: Consumers are seeing pressure from too much credit card debt at high interest rates. ULTA also said that there are mixed data points around the economic situation for the majority of consumers. The company noted that it has seen a slowdown in demand across beauty categories.

[iwfal]

The best leadership can make mistakes and take time to right the ship, but the last several years have been too many sucker punches to not recognize a pattern and want out.

And some mistakes are much much harder to fix after the fact:

A) back when they thought they could get premium pricing in aesthetics they decided not to do the Botox strategies to decouple the pricing on the aesthetic side from pricing on the therapeutic side (eg freebies for aesthetics injectors as long as the injectors obeyed rules that were unenforceable) There wasn’t much need if you were getting premium pricing in aesthetics. But then they had to cut aesthetic prices and since it wasn’t decoupled … they eviscerated the pricing in therapeutics.

B) regaining trust of injectors who thought that they could just use it the same as Botox and get longer duration easily. Ok, that was naive on the part of the injectors - but that’s still mostly a Revance Big Boy problem. They should have known that wasn’t possible and been clear on this - while setting up a system to allow lesson sharing. Note: they really need to be transparent on this - eg what percent of injectors from 2Q 2023 reordered in Q4? In Q1 2024?

Other areas will be more easily fixed - eg give patient coupons, allow injectors to advertise on price. But other things will be harder to fix.

[biotech_researcher]

Well stated…

[Ms.Dtox]

It’s not updated. She’s gone as of last week.

[alertmeipp]

>> I post when I have something to say.

Good point. There is really no news after the secondary... except the share price has been dropping like a rock.

[go seek]

Jessica Serra is listed as the IR contact on the Revance website.

[soma2022]

I see your points and do not disagree with you.