Biotech Values

[DewDiligence]

RVNC sells 6.76M* shares @$17—a 15.8% discount to Tuesday’s close:

https://investors.revance.com/news-releases/news-release-details/revance-announces-pricing-public-offering-common-stock-1

The fully-diluted share count* is now 48.0M, up from 41.2M (see #msg-144654911), an increase of 16.5%.

RVNC’s pro forma cash balance* is now about $300M, which is enough to comfortably cover operating expenses through the expected RT002 launch in 1H20, given the expected slowdown in R&D spending following the completion of the (very expensive) SAKURA-3 study (#msg-146126877).

The offering’s discount of 15.8% (relative to Tuesday’s close) is on the high side for a company of RVNC’s stature, so it’s reasonable to surmise that the execution could’ve been better; however, this offering is certainly not a deal-breaker for the investment thesis.

To the contrary, RVNC’s enterprise value (based on today’s anticipated price range) is barely more than $500M, which I would characterize as dirt cheap for a company that has completed phase-3 trials with a large, blemish-free dataset and has a product candidate that is very likely to become the best-in-class treatment in a rapidly expanding global market for both aesthetic and therapeutic indications.

*Assuming exercise of $15M underwriter’s option.