Replies to post #2423 on Revance Therapeutics Inc (RVNC)

[DewDiligence]

RVNC borrows $300M* @8.5%—notes_ do_not_have conversion_option:

https://investors.revance.com/news-releases/news-release-details/revance-closes-300-million-note-purchase-agreement-athyrium

Revance Therapeutics…today announced the closing of a $300 million note purchase agreement with funds managed by Athyrium Capital Management, LP, a leading healthcare-focused investment firm.

The $300 million note purchase agreement includes three tranches [of $100M each], subject to the terms and conditions of the note purchase agreement:

• First tranche note of $100 million;

• Second tranche note of $100 million available within 18 months after the closing of the note purchase agreement, subject to certain conditions including the FDA approval of DaxibotulinumtoxinA for Injection for glabellar lines; and

• Uncommitted [i.e. at RVNC’s option] third tranche note, of up to $100 million available until March 31, 2024, subject to certain conditions including the achievement of greater than or equal to $50 million in trailing twelve months revenue for DaxibotulinumtoxinA for Injection for glabellar lines, preceding the date of the draw request for the third tranche note.

Revance issued the first tranche note of $100 million at the closing of the note purchase agreement.

Committed borrowings under the note purchase agreement bear a fixed interest rate of 8.5% per annum. The notes mature on either (i) 4.5 years from the closing of the note purchase agreement on September 18, 2026; or (ii) subject to the purchaser’s consent, 6 years from the closing of the note purchase agreement [i.e. March 18, 2028], if as of September 18, 2026, less than $90 million principal amount of the company’s existing 2027 Convertible Notes remain outstanding.

$200M of the $300M total is committed; the final $100M is at RVNC’s option.

RVNC had pro forma cash of ~$188M at 12/31/21 (#msg-168050553), so the new borrowing gives RVNC sufficient cash for the next several years.

More details in this 8-K filing:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001479290/000119312522080111/d328994d8k.htm

[DewDiligence]

RVNC pro forma cash @3/31/22=$223.2M—an increase of $35.0M relative to 12/31/21 (#msg-168050553) due to financing activities during 1Q22.

The $223.2M figure above consists of the net current assets on the 3/31/22 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001479290/000119312522146362/d327432d10q.htm#id375bd61c7fe4ceea8c0261ee845a3ae_16 ) after excluding the $9.0M “Deferred revenue, current” line, which is an accounting artifact rather than a bona fide liability.

(Excluded from the above figure is the $22.9M raised from use of the ATM facility since 3/31/22.)

Note: In the above calculation, RVNC’s convertible debt is considered as straight equity, and hence it does not enter into the arithmetic.