Revance Therapeutics Inc (RVNC)

[DewDiligence]

Your sky-is-falling analysis overlooks a few things:

• Daxxify’s gross margin will go up with increasing volume as fixed costs are spread over more units.

• Since Daxxify has a higher gross margin than the RHA fillers, RVNC’s overall gross margin will increase as Daxxify becomes a larger proportion of RVNC’s product sales.

• RVNC is due milestone payments from VTRS for regulatory progress on the Botox-biosimilar JV. Notably, when VTRS sold its biosimilar business to Biocon in 2022, VTRS opted to retain ownership of the Botox-biosimilar JV (#msg-168030145). The obvious inference is that VTRS thinks the Botox-biosimilar program has legs.

• RVNC will receive an undisclosed but likely substantial milestone payment from Fosun Pharma when Daxxify is approved for marketing by China’s NMPA for the first aesthetic indication—see p.24 of https://www.sec.gov/Archives/edgar/data/1479290/000147929019000030/rvnc1231201810kex1042.htm . Daxxify’s BLA has been under regulatory review in China since Jul 2023 (#msg-172328961).

• There’s a decent chance that RVNC will be acquired before the convertible and non-convertible debt matures in 2027 and beyond.