Biotech Values

[DewDiligence]

RVNC selling $230M* of 7-year convertible debt on unspecified terms:

https://investors.revance.com/news-releases/news-release-details/revance-announces-proposed-private-offering-200-million

The devil is in the details, which haven’t been reported yet. If the conversion price of the debt is around $40 (or higher), this isn’t necessarily a bad deal for existing shareholders. However, the debt offering undermines the buyout thesis, so in that sense it’s bearish.

Notably, RVNC gets to decide whether to redeem the bonds in cash, shares, or a mix of cash and shares:

The notes will be convertible into cash, shares of Revance’s common stock or a combination of cash and shares of Revance’s common stock, at Revance’s election [emphasis added]. The interest rate, initial conversion rate and other terms of the notes will be determined at the time of pricing of the offering.

*Assuming exercise of underwriter’s option.