Replies to post #5733 on Revance Therapeutics Inc (RVNC)

[Emannow]

Are your assumptions that Fosun Pharma (China) and Teaxone (Europe) will not receive approval to sell Daxi and there will be zero sales of Daxi outside of the USA?

[alertmeipp]

You are assuming

- RVNC will HAVE to pay cash to settle the convertible - That's not the case.

- There will be no other financing available to RVNC even it becomes cash flow positive in 2025 with 400mm+ of sales and growing. - That's not likely. If they have 400mm sales in 2025 and generate cash, they should be able to refinance their debt.

- Zero milestone payments from China, etc... They should get 40mm? this year if approval comes (that's the current expectation).

Sure if all your assumptions were true, then obviously your conclusion will be>

[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.

[alertmeipp]

I think your math is off?

>>Let's charitably assume that in 2024 RVNC pulls in 320m of revenue at 70% GMs = 224m gross profit vs 300m in opex = a minimum of 75m cash burn during the year. That leaves us at 285m cash ending 2024.

So if they have 250mm cash on hand now, you expect they draw the 3rd tranche (150mm), they would have 400mm cash on hand. If 75mm cash burn, they should have 325mm YE? What am I missing?