Athyrium 100m first tranche matures on Sept 2026. Convertibles 287m mature on Feb 2027. Athyrium Second 50m tranche on end 2027. Athyrium Third tranche 150m end of 2028.
Athyrium may consent to extend the term on the notes if the outstanding value of the 2027 converts is below 90m by Sept 2026. So they can either pay down 197m to extend the Athyrium maturities or repay the principals in the sequence above.
Current cash levels are at 250m. I expect them to draw the final 150m tranche from Athyrium during Q1. Cash can't go below 30m as it would trigger a debt covenant. So let's assume available liquidity to be at 360m.
Let's charitably assume that in 2024 RVNC pulls in 320m of revenue at 70% GMs = 224m gross profit vs 300m in opex = a minimum of 75m cash burn during the year. That leaves us at 285m cash ending 2024. In 2025 let's again charitably take them at their word that they won't burn much and will be 'adjusted EBITDA' positive in 2025, so another 20m burned = 265m cash ending 2025.
Now, in 2026 they'll have to repay 197m of the converts to get an extension from Athyrium. But note that in addition to this the Athyrium tranches will need to receive a % of the second tranche principal back prior to maturity (call it 25% in quarterly schedules), so another 12.5m in repayments for a total of 209.5m.
This would bring cash down to 56m before assuming any cash from operations. How much cash can RVNC bring in 2026? A base case 500m in sales (given aesthetics trajectory) should bring in 50m, for a total of 106m ending the year. Is that enough considering they need to repay 90m in 2027 and ~290m from 2028? What happens if something else goes sideways? If I was CFO I'd want more cash on the balance sheet. Given the huge debt stack, this means dilution.
This is why the shocking failure of the launch thus far is such a big deal. The embedded operational and financial leverage amplify the failure. With the stock down 80%+ from recent highs, I think the market got this one right in a big way.
