We have shorts who are betting heavily that a dilutive capital raise will be needed by mid to late 2024 because cash burn will stay at $50 to $70M per quarter through much of 2024. We have Revance's CEO, Mark Foley stating otherwise. Revance has $150M of credit remaining on the Athyrium 8.5% int credit facility.
The current share price has fully priced in a dilutive raise and slow revenue growth next year IMO (e.g. Total Daxi annual sales growth of less than 100% from 2023 to 2024). Revance is trading like a commodity NT that will never get to much more than 10% US market share in Aesthetics and will be forced to compete on price to achieve that share.
A binary outcome is thus pending in the not too distant future.
A $12M to $15M Daxi sales shortfall the last 2 quarters (by my estimates) has decimated $2.5B in market cap: that is a $170M hit to market cap for every $1M in revenue miss. The converse may also hold true in the event that Daxi sales materially beat and accelerate going forward.
The January 9th, 2023 pre release: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001479290/8429c6d6-858e-445e-a255-ccdb265540f8.pdf Revance Provides an Update on DAXXIFY® Commercial Launch and Preliminary Fourth Quarter and Full Year 2022 Financial Results • DAXXIFY® PrevU program off to strong start with ~400 select practice partners and thousands of patients treated, generating positive feedback and strong, early uptake • Preliminary unaudited Q4 DAXXIFY® revenue from PrevU of between $10.5 million and $11.5 million • Preliminary unaudited Q4 RHA® Collection revenue of between $34.0 million and $35.0 million, a YoY increase of approximately 45%
With regard to the above preannounce, the street clearly didn't expect PrevU sales to come in at $11M from such a small number of accounts and the stock rose to close at $30.41 on Monday after having closed at $19.71 on Friday (up 54% in a day) It gapped up $3 on the opening trade and then jumped up $8 soon after leaving no time to buy anywhere near where it closed the prior trading day. In this case a $5M Daxi revenue beat led to a $900M gain in market cap in a single day: coincidentally: also a 180:1 ratio of market cap gain to Daxi revenue upside.
I expect algorithmic trading will continue to dominate and drive large volatility in share price for the foreseeable future based on Daxi revenue beats/fails.
Let's assume 150 sales reps bring on 800 to 1000 new accounts in Q4 due to the big Daxi price drop: 40 vials/account at $310/vial = $10 to 12M of additional quarterly revenue that is stacking on reorders from the existing 2500 accounts. They stated on their last CC that the average reordering account last quarter ordered 43% more vials than their previous order so if reordering accounts generate $20 to $28M of sales and new accounts add $10 to 12M we can see Q4 Daxi sales coming in around $35M plus/minus (60% Q/Q growth). Add another solid RHA quarter with growth above Q3 at $36M and we get to revenue in the low $70Ms. Current mean analyst estimate is $67M (range of $63M to $77M).
a 180 to 1 leverage ratio on Market cap gain to quarterly Daxi sales beat must be piquing the interest of some hedge fund managers as well as pushing some shorts to cover soon. We could sure use some help from the wallstreet bets reddit crowd right about now. 😀
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