Replies to post #2817 on Revance Therapeutics Inc (RVNC)

[mouton29]

It's a long (8 page) discussion, part of an 67 page analysis of 7 mid-cap stocks. This is part of the discussion:

For our Base case we model Daxify cosmetic 2025/2030 sales of $227mn/$688mn and a ~15% US market share in 2030. In our model we estimate Daxify takes half the share position from other toxins, which represents 30% of the market (ABBV holds the other 70%). RVNC can achieve this through product differentiation (longer profile) and a bundling strategy with fillers, which a number of other players do not have. For our Bull case we model 2025/2030 sales of $454mn/$1.4bn, Daxify's profile and bundling strategy incentives practices to switch from ABBV and Daxify can capture >30% of the overall market. In our Bear case Daxify uptake is more limited and we project 8% share of the other toxin market resulting in 2025/2030 sales of $113mn/$344mn.

Daxify could result in less frequent visits to practices and would be more convenient for patients receiving treatments, but could impact practice economics via fewer office visits. If Daxify leads to fewer patient visits, practices will have to extract more profit from each visit to stay cost neutral. This could be achieved by higher prices to patients and/or lower cost of product (i.e., larger rebate from RVNC). RVNC has noted that it plans to price Daxify at a premium to Botox, but has not yet provided a list price. We ran a scenario analysis to determine the required profit/visit for Daxify to stay cost neutral with Botox assuming 900 patients visiting a practice 1-4 times per year for toxin (Exhibit 62). Based on our estimates, switching from Botox to Daxify could lead to a 24% decline in visits per year (1,710 from 2,250) and require a ~30% increase in profit per visit ($347 from $264) in order for the practice to stay cost neutral ($594,000 total profit).

Thus, they are assuming that there's no loss of market share by ABBV, although I suppose it doesn't really matter where RVNC takes share, the pertinent question is how much do they take, not from who.

On the loss of revenue to the practice, that assumes that the practice can't fill the extra capacity with new patients, I suppose the supply of patients isn't infinite but assuming that a premium practice can't fill any empty slots seems conservative.

Note that they misspell "Daxxify" it's two "x's". Twice as many x's as Botox, twice the median duration of effect.