Revance Therapeutics: FDA Approval Of Daxxify Only One Part Of The Journey (NASDAQ:RVNC)

Revance Therapeutics, Inc. (NASDAQ:RVNC) is a a great speculative biotech play to look into. The reason why I state that is because it has been able to obtain FDA approval for DAXXIFY for the treatment of patients with Glabellar (frown) lines. It was a tough road, but now it is capable of entering this multibillion-dollar market.

The thing is that DAXXIFY for this particular indication is only part of the Aesthetics pipeline that Revance has. It is also using DAXXIFY for the treatment of patients with cervical dystonia. Matter of fact, it has already submitted a supplemental Biologics Licensing Application ((sBLA)) to the FDA for the treatment of this specific patient population. This will allow this biotech to target another large market indication. It believes that the cervical dystonia market in the United States alone could bring in about $1 billion or more in revenues. The data to support this sBLA filing of DAXXIFY for cervical dystonia comes from two late-stage studies, which were ASPEN-1 and ASPEN-OLS. Should this sBLA filing be accepted by the FDA, then Revance believes it could possibly have a PDUFA date set for 2023. That is, a specific date set in 2023 where the FDA will have to review this drug for potential approval of this cervical dystonia indication.

With an approval of DAXXIFY for glabellar lines already established, plus the potential to expand to the $1 billion U.S. cervical dystonia market, these are the reasons why I believe that Revance Therapeutics is a great speculative biotech play to look into.

FDA Approval Of DAXXIFY Moves Revance Forward Towards Greatness

Revance had a huge problem before receiving FDA approval of DAXXIFY for the treatment of patients with glabellar (frown) lines. It was hoping to obtain FDA approval of this drug for this patient population back in October of 2021, but instead it received a Complete Response Letter (CRL). At the time, the FDA noted that there were deficiencies and thus, it could not approve the drug in its current form. A major issue noted was that there were deficiencies with respect to the FDA’s onsite inspection at Revance’s manufacturing facility. A type A meeting further clarified the issues that needed to be addressed.

Besides the manufacturing issue noted, another item that needed to be fixed was a new working cell bank (WCB). These issues were addressed and on September 8, 2022 it was noted that the company had received FDA approval of DAXXIFY for the treatment of patients with glabellar (frown) lines. FDA approval of this drug for this indication was given because of the positive results that were achieved from the phase 3 SAKURA program. It was revealed that about 74% of patients achieved a > two-grade improvement in glabellar lines at week 4 per both the investigator themselves and patient assessment. The average duration of treatment lasting was 6 months. However, some patients to received DAXXIFY were able to achieve a duration of up to 9 months.

The key point of the data being released would be with respect to the duration of treatment. Why is that? Well, that’s because it now has a competitive advantage over the rival treatment BOTOX based on such duration. AbbVie (ABBV) grabbed Allergan in a $63 billion merger that was achieved back in 2020. The likely reason is because of BOTOX. Especially, when you consider that the estimate from the Aesthetics Society is that it generated more than $14.6 billion in 2021 alone. This is a large market opportunity and now Revance has the chance to do well in it. The competitive advantage it has is that treatment duration in up to 50% of patients lasted up to 6 months, whereas BOTOX tends to last up to 4 months. As I stated directly above, some patients were able to have a duration of DAXXIFY go as much as 9 months.

FDA Approval Of DAXXIFY For Glabellar Lines Is Only One Part Of The Equation

As noted above, FDA approval of DAXXIFY for the treatment of patients with glabellar (frown) lines is only one part of the equation. Why is that? That’s because it only encompasses the Aesthetics use of this particular drug. DAXXIFY is also being advanced for the treatment of patients with cervical dystonia. Matter of fact, Revance has already submitted a supplemental Biologics Licensing Application (BLA) to the FDA for the treatment of patients with this disorder. Cervical dystonia is a condition whereby a patient’s neck muscles contract involuntarily causing the head to twist.

Another problem is that it can cause the head to tilt forward or backward as well. It is quite painful for patients and the current treatment option is BOTOX. Being that BOTOX wears off in about 3 months, this is where Revance may also have the upper hand in this indication, because of duration of the treatment lasting up to 6 months. I’m in the opinion that if the company can market this drug properly, it could probably take a lot of market share from BOTOX. In addition, I believe that Revance could end up being a strong takeout candidate for another big pharmaceutical company. Why is that? Well, any new drug such as DAXXIFY, which is capable of having such a competitive advantage over BOTOX, means a lot of revenue to be had. Again, BOTOX was estimated to bring in greater than $14.6 billion in revenues in 2021.

I believe that big pharma would love to get their hands on DAXXIFY for this fact alone. DAXXIFY was able to achieve the primary endpoint of the phase 3 program. The primary endpoint was to demonstrate improvement in the signs and symptoms of cervical dystonia at the average of Weeks 4 and 6. DAXXIFY was compared to placebo based on this endpoint using a measurement known as the Toronto Western Spasmodic Torticollis Rating Scale (TWSTRS) Total Score. The breakdown of this is as follows:

• 125 units of DAXXIFY versus placebo, from baseline – statistical significance achieved with a p-value of p<0.0001
• 250 units of DAXXIFY versus placebo, from baseline – statistical significance achieved with a p-value of p=0.0006.

Based on this positive data, this is the reason why Revance was able to submit its supplemental Biologics Licensing Application (BLA) to the FDA for the treatment of patients with cervical dystonia.

Financials

According to the 10-Q SEC Filing, Revance Therapeutics had cash, cash equivalents and short-term investments of $378.6 million as of September 30, 2022. Revance is in a great position, because having received FDA approval of DAXXIFY for Glabellar lines, plus the potential to receive approval for the other indication cervical dystonia, it already generates revenue with another Aesthetics program. This involves RHA Collection Redensity for Perioral Rhytids (lip lines) plus other RHA products for Dynamic facial wrinklesand folds. In terms of total revenue for Q3 of 2022, the company generated $29 million, which was a year over year increase of 47%. The RHA Collection revenue reached $26.1 million for the quarter, which was a year over year increase of 43%.

A big reason for the cash on hand is because of an underwritten public offering it had completed around September 15, 2022, whereby it sold a total of 9,200,000 shares of its common stock at a price of $25 per share. In total, it generated net proceeds of $215.9 million from it. It should be good on cash for quite some time and the reason why I say that is because it has another back up option in place. It has $100 million of notes available for issuance through Athyrium Capital if it needs to use it.

Not only that, but it also had an At-The-Market Offering with Cowen, which was updated with a new agreement on May 10, 2022. Under this new 2022 ATM agreement, Revance can sell up to $150 million of common stock. As of September 30, 202, plus the filing date of this earnings report, no shares of common stock have been sold under this particular agreement. It estimates that it should have enough cash to fund its operations for a least 12 months from the date of the 10-Q SEC filing, which was filed on November 8, 2022. I believe that if it does enact another means to raise cash, it may not do so until the 2nd half of 2023.

Risks To Business

There are several risks that investors should be aware of before trading/investing in Revance Therapeutics. The first risk to consider would be with respect to the filing of the sBLA of DAXXIFY for the treatment of patients with cervical dystonia. Even though the sBLA was filed with the FDA, it does not mean that the agency will accept it. In other words, if the FDA feels that the regulatory application is not complete, then that would put a huge delay for Revance. Even if the sBLA is accepted for DAXXIFY for cervical dystonia, that would only set up a PDUFA date in 2023. That means, the FDA would decide upon regulatory approval at such time. There is no guarantee that the FDA will decide to approve DAXXIFY for this particular indication.

A second risk to consider would be the FDA approval of DAXXIFY for the treatment of glabellar lines which has already been obtained. Revance will need to do well in its marketing efforts for this market to attempt to challenge BOTOX. The good news is that the company has competitive advantage with DAXXIFY and that being that treatment duration lasts up to 6 months. Whether or not such a competitive advantage allows it to take market share from AbbVie remains to be seen.

Conclusion

The final conclusion is that Revance Therapeutics is a great speculative biotech play to look into. I believe that the FDA approval is now launching it into a huge multi-billion dollar market. I want to reiterate that BOTOX sales were estimated to be more than $14.6 billion in 2021. Even if Revance with DAXXIFY is only able to obtain half of this revenue, that would still be a good step forward for it. It won’t stop there, though, that’s because the sBLA has the opportunity to allow the biotech to possibly obtain FDA approval of DAXXIFY for another indication, which is cervical dystonia. Of course, it will have to challenge AbbVie for this indication as well, but again it could end up stealing market share for this target, should it ultimately receive regulatory approval for it.

Based on FDA approval of DAXXIFY for glabellar (frown) lines already being achieved, plus the potential to receive sBLA approval for cervical dystonia as well, these are the reasons why I believe that Revance Therapeutics is a great speculative biotech play to look into.