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Revance Therapeutics, Inc. (RVNC)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 revenue rose 40% year over year to $69.8M, driven by DAXXIFY and RHA; product revenue was $58.5M (RHA $34.5M, DAXXIFY $24.0M). Sequential DAXXIFY vials sold increased 22% versus Q3 as reorders became the majority of revenue, though lower ASP from the September pricing reset partially offset growth .
  • 2024 guidance: product revenue of at least $280M; GAAP OpEx $460–$490M and non-GAAP OpEx $290–$310M, reflecting OPUL exit savings and organizational streamlining; management continues to target positive Adjusted EBITDA in 2025 .
  • Therapeutics catalyst: DAXXIFY for cervical dystonia (CD) on track to launch mid‑2024, with a permanent J‑code obtained in January and >50% commercial coverage secured; >300 patients treated in PrevU program with encouraging duration and safety feedback .
  • Balance sheet: $253.9M in cash, cash equivalents and short‑term investments at 12/31/23; GAAP and non‑GAAP 2023 OpEx landed at the low end of prior ranges, improving operating leverage into 2024 .

What Went Well and What Went Wrong

  • What Went Well

    • DAXXIFY adoption momentum: Q4 DAXXIFY volume +22% q/q; >two‑thirds of Q4 DAXXIFY revenue from reordering accounts; >3,000 DAXXIFY accounts by year-end, underscoring deepening penetration with improved pricing/engagement strategy .
    • RHA execution and pipeline: RHA remained the fastest‑growing filler by market share; Q4 RHA revenue $34.5M; FDA label expansion for RHA 3 (lips) adds a 2024 growth lever .
    • Therapeutics launch setup strong: Permanent J‑code in January, >50% commercial coverage before launch; >300 patients across ~30 practices in PrevU with 94% of surveyed physicians perceiving longer duration than conventional toxins based on cycle 1 .
    • Management quote: “We are well positioned to execute on our strategic priorities and achieve our product revenue guidance of at least $280 million in 2024” .

  • What Went Wrong

    • Pricing/ASP pressure: While DAXXIFY volumes rose, the new pricing strategy lowered ASP, tempering revenue growth; this dynamic also occurred in Q3 as the pricing reset took effect .
    • Losses remain material: Q4 net loss was $(55.7)M; operating loss $(54.0)M; Adjusted EBITDA loss $(42.6)M, reflecting ongoing scale-up and commercial investment needs .
    • Elevated OpEx base: Q4 GAAP OpEx of $123.8M (full-year $550.8M) underscores the need for 2024 cost discipline; OPUL wind‑down should help (up to ~$20M annual savings), but execution is key .

Financial Results

MetricQ2 2023Q3 2023Q4 2023
Total Revenue ($M)$58.134 $56.776 $69.799
Product Revenue ($M)$54.393 $54.109 $58.498
- RHA Collection ($M)$31.767 $32.133 $34.467
- DAXXIFY ($M)$22.626 $21.976 $24.031
Service Revenue ($M)$3.721 $2.664 $2.307
Collaboration Revenue ($M)$0.020 $3.970 $8.994
Total Operating Expenses ($M)$123.633 $196.069 $123.752
Loss from Operations ($M)$(65.499) $(139.293) $(53.953)
Net Loss ($M)$(67.318) $(141.176) $(55.699)
GAAP EPS (Basic & Diluted)$(0.80) $(1.63) $(0.62)
Adjusted EBITDA ($M)N/A$(31.897) $(42.626)
Cash, Cash Equivalents & ST Investments ($M, period end)$319.7 $300.2 $253.9

Segment/Product breakdown and KPIs

KPI / MixQ2 2023Q3 2023Q4 2023
DAXXIFY vials sold q/qN/A+10% q/q +22% q/q
DAXXIFY revenue from reordering accountsN/A~two‑thirds >two‑thirds
DAXXIFY accounts (cumulative)N/A>2,500 >3,000
Aesthetic portfolio accounts (cumulative)>6,000 >6,500 >7,000
CD PrevU patients treated (cumulative)N/A>150 >300 (~30 practices)

Notes:

  • Q4 collaboration revenue uplift reflects biosimilar progress with Viatris recognized from deferred revenue .
  • DAXXIFY ASP headwind continued due to the September pricing reset aimed at accelerating trial and adoption .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Product RevenueFY 2024N/A (first issue in these documents)At least $280M New
GAAP Operating ExpensesFY 2024N/A$460–$490M New
Non‑GAAP Operating ExpensesFY 2024N/A$290–$310M New
Non‑GAAP SG&AFY 2024N/A$240–$255M New
DAXXIFY CD Launch Timing2024Mid‑year expected On track mid‑year 2024 Maintained
OPUL Exit Cost SavingsOngoingUp to ~$20M annually (plan announced Sep’23) Up to ~$20M annually; exit by end of Q1’24 Maintained/timing affirmed
Positive Adjusted EBITDA Target20252025 2025 Maintained
2023 GAAP & non‑GAAP OpExFY 2023GAAP: $545–$585M; non‑GAAP: $315–$335M Actuals at low end of ranges Achieved low end

Assumptions cited by management for 2024 include RHA and DAXXIFY aesthetic share growth, modest CD revenue contribution post mid‑year launch, and lower OpEx from OPUL exit and streamlining .

Earnings Call Themes & Trends

TopicQ2 2023 (Prev‑2)Q3 2023 (Prev‑1)Q4 2023 (Current)Trend
DAXXIFY pricing & adoptionFirst full quarter; added >50 sales reps; DTC “Break Up with Botox” launched .Competitive pricing introduced 9/1; reorders and volumes improved; ~two‑thirds revenue from reorders .Q4 vials +22% q/q; >two‑thirds revenue from reorders; removed no‑advertised price policy; launched $75 patient coupon .Improving adoption with broader marketing levers.
Provider engagementExpanded field force; >6,000 aesthetic accounts .Focused re‑engagement of existing DAXXIFY accounts; CCO appointed .Emphasis on training, tools, thought leadership, and account prioritization into Q2’24 for new activations .Deeper, structured re‑engagement; new account push next.
RHA portfolioRHA4 cannula label expansion (July) .RHA market share gains YTD .RHA 3 lip indication approved (Jan’24) with Q2’24 launch planned .Sustained innovation supports growth.
OPUL exit/costsNot featured.Exit by end Q1’24; ~$20M annual savings expected .On track; part of lower 2024 OpEx guide .Execution underway; cost discipline.
Therapeutics/CDPDUFA timing communicated .CD PrevU underway; J‑code expected early 2024 .J‑code received; >50% commercial coverage; >300 patients treated; measured launch mid‑2024 .Launch readiness strengthening.
Partnerships/Intl—Fosun BLAs (China) accepted; approvals anticipated 2024 .Reiterated strategic partnerships and long‑term opportunity .Optionality building.
Org changes—CCO (Aesthetics) appointment .CMO also Global Therapeutics Franchise Lead; CEO reassumes therapeutics oversight; CFO over manufacturing/supply chain .Streamlined leadership to execute.

Management Commentary

  • CEO on setup and outlook: “We are well positioned to execute on our strategic priorities and achieve our product revenue guidance of at least $280 million in 2024… focused investments… and disciplined expense management will… achieve positive Adjusted EBITDA in 2025” .
  • On DAXXIFY adoption drivers: “DAXXIFY… offers a compelling value proposition because of its unique peptide formulation, fast onset, long duration and ability to enhance the skin's appearance” .
  • On CD launch economics: “With one‑to‑one dosing and current vial price… there’s a material discount for payers… which is why we've seen such strong commercial coverage” .
  • CFO on 2024 guidance: “Aim to deliver increased y/y product revenue while decreasing OpEx levels; non‑GAAP OpEx $290–$310M; non‑GAAP SG&A $240–$255M” .

Q&A Highlights

  • 2024 top‑line mix and confidence: Growth to come from deeper penetration in existing accounts and new account adds beginning in Q2; >2/3 of Q4 revenue from reorders points to product stickiness post pricing reset .
  • Account activation/training cadence: Latitude to field teams; initial focus on RHA‑linked accounts; broader aperture now that pricing aligns with market; training remains central to adoption .
  • Pricing communication & demand stimulation: Targeted re‑engagement with existing accounts on pricing rationale; $75 patient coupon piloted; removal of no‑advertised price policy enables practice‑level promotion .
  • Bundling potential: Intends to introduce DAXXIFY+RHA incentives after products are established on merit; expects to help drive share of wallet later in 2024 .
  • Payer coverage & Medicare: >50% commercial coverage, ~2/3 first‑line within those plans; Medicare 100% covered (~20% of market) with additional work on Medicaid .
  • Capital structure: Path to positive EBITDA in 2025 viewed as unlocking financing options; continued prudent capital management .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for RVNC were unavailable via our tool at the time of analysis; therefore, we cannot quantify revenue/EPS beats or misses versus Wall Street consensus, nor show estimate deltas. We will update when S&P mapping becomes available [tool error noted].

Key Takeaways for Investors

  • DAXXIFY adoption is accelerating on volumes and reorders post pricing reset; expect continued momentum as new account activation ramps in Q2 2024 and practice marketing increases following NAPP removal .
  • 2024 setup balances growth and discipline: At least $280M product revenue with reduced OpEx (non‑GAAP $290–$310M) positions RVNC to approach positive Adjusted EBITDA in 2025 if execution holds .
  • Therapeutics catalyst mid‑year 2024: CD launch has favorable reimbursement tailwinds (permanent J‑code, >50% commercial coverage); early real‑world data suggest longer duration in PrevU—watch uptake and dosing patterns .
  • RHA remains a durable growth engine; the new lip indication for RHA 3 in Q2 2024 should aid cross‑selling and portfolio synergies with DAXXIFY .
  • Cost actions (OPUL exit) and streamlined org should support operating leverage; monitor quarterly non‑GAAP SG&A trajectory versus the $240–$255M target .
  • Near‑term trading implications: Q1 may reflect typical seasonal softness; watch sequential DAXXIFY vials and reorder mix as leading indicators into Q2 ramp .
  • Medium‑term thesis: If aesthetics growth compounds and CD gains traction, RVNC can drive scale benefits toward EBITDA breakeven in 2025; partnerships (Fosun, Viatris) and international expansion offer longer‑dated optionality .