Benzinga - by Nabaparna Bhattacharya, Benzinga Editor.
Needham analyst Serge Belanger reiterated a Buy rating on Revance Therapeutics, Inc. (NASDAQ: RVNC), lowering the price target to $35 from $40.
The price target adjustment reflects the various business changes. The analyst thinks RVNC discontinuing the Opul business ($3.7 million revs in 2Q23) will lead to a non-cash impairment charge of $80 million-$100 million. The business was projected to grow into a $50 million-$70 million unit by 2027/2028.
For FY23, the analyst lowered the revenue estimate from $240.4 million to $234.1 million. For FY24, Belanger lowered the revenue estimate from $340.9 million to $319.7 million.
According to the analyst, investors are more focused on near-term sales guidance (3Q23 revs to be similar to 2Q23), a new pricing strategy (lower price similar to Botox), and the discontinuation of the Opul business, which drove the stock down 17% (vs a flat S&P 500).
Belanger adds that 3Q23 guidance reflects a seasonal slowdown in RHA fillers, the Opul business was not a significant revenue contributor, and the new pricing strategy removes a key barrier for Daxxify uptake.
On the positive side, Belanger expects Daxxify to be a blockbuster product with peak sales of $500MM in both aesthetics and therapeutics.
Overall, the analyst thinks RVNC is well-funded, projecting a positive adj EBITDA in 2025.
The analyst notes that RVNC rolled out a new Daxxify pricing strategy on 9/1/23 that lowers the product's price levels by ~25% to align with Botox. The lower price should remove a key barrier for broader adoption by physicians and enhance uptake of the product, which currently has a ~16% market share.
Price Action: RVNC shares are trading lower by 1.96% to $13.54 on the last check Wednesday.
Latest Ratings for RVNC
| Oct 2021 | Barclays | Maintains | Overweight | |
| Oct 2021 | Wells Fargo | Downgrades | Overweight | Equal-Weight |
| Oct 2021 | Needham | Maintains | Buy |
View the Latest Analyst Ratings
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