Like another poster I have a big position in Immunogen (whose acquisition by Abbvie closed today) so I need to redeploy that capital and I was considering to double down on my very substantial Revance position (currently significantly under water).
I spoke last week to two doctors from two major NYC derm practices. Both operate in similar ways (doctors do all injections and are supported by RNs or MAs that prepare the toxins or fillers, so doctors do not personally dilute). I regret to say the feedback sounded more like boraborak’s than soma’s… These practices were highest tier Botox users just a few years ago, but now they have switched most of that to Jeuveau because of the lower cost unless Botox is requested by patient. My major takeaways:
1. Only 30% of the doctors in these practices employs Daxi in any significant way. That is because after the botched introduction they formed a negative impression and are not going to give it another chance for a while.
2. For the doctors that use it, about half the patients that try it go back to their previous 3-month toxins. Primarily because they don’t get duration to justify the premium price charged. They mentioned that unlike CA, in NYC top practices charge by the area, not by the unit. These practices charge the same price for all other toxins, but a 40-50% premium for Daxi.
3. I shared the gist of soma’s protocols but they do not expect to be trying daxi in anything other than the 2:1 units. No daxi light. That is primarily because it is very hard to train the staff that prepares the syringes to dilute in equivalence to 1:1.25 or 1:1.65 ratios to Botox (that is in part because of staff turnover). They said that a major reason why it was easy to switch to Jeuveau is that preparation is identical to Botox. They understand why daxi has the different units, but they wish Revance had packaged the vials so that preparation was identical to Botox. They are not concerned about the compensatory reactions soma mentioned with 2:1 because they inject all the muscles in an area. That said they still find the frontalis challenging.
4. Their new Revance rep seems great.
5. They were both very positive on Teoxane (these are KOLs that have met with both Foley and the Teoxane leadership). They expect Teoxane to do a better job with Daxi in Europe, learning for the botched US intro. They think Foley is a very smart guy but both said they warned him against the premium pricing and he didn’t listen.
6. They like a lot the latest filler that Revance introduced (I believe they were talking about RHA-4) but they said there are several new fillers about to be introduced that may compete. They also said that Teoxane is testing in Europe the next generation of fillers already, so Revance’s current line is already obsolete. (I am not sure that matters as long as this also applies to U.S. competition as well, and Revance will eventually get the next generation from Teoxane).
7. They think Daxi will likely do great in the therapeutic market for the reasons that have been discussed on this board.
Just reporting the above.
My interpretation of all this is that the negative feeling about Daxi in the cosmetic market will take at least until EOY to overcome, and market share won’t grow fast until then. I am hoping that once we get enough injectors and consumers to try it there will be acceleration in the market share with a 3x increase in revenues. Fillers also should grow at recent path for the next year or two. Therapeutic could be a major positive by EOY.
While the current market sentiment seems negative, I give it 4/5 that the financials will follow the path outlined by soma and others, enabling Revance to get to breakeven without a dilutive raise in the single digits (although if the price recovers to mid-teens, I wouldn’t be surprised if they raise a significant amount to make sure they can meet debt obligations). Doesn’t seem a 10-bagger at this point, at least not for the next 3 years, but the current price seems too depressed.
AI
