Discontinuation Of Opul Business Weighs On Botox Rival Revance Therapeutics: Analyst Sees Non-Cash Impairment Charge In Millions

Needham analyst Serge Belanger reiterated a Buy rating on Revance Therapeutics, Inc. 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.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorEquitiesNewsPrice TargetReiterationSmall CapMarketsAnalyst RatingsTrading IdeasGeneralBriefsExpert Ideas
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!