Brean Reiterates Buy Rating On Revance Ahead Of Upcoming Phase 3 Read Out

Brean Capital has reiterated its Buy rating on Revance Therapeutics Inc

ahead of the upcoming Phase III read-out of RT001 (lateral canthal lines), which is expected in the next 1.5 months. RT001 is currently in a late stage study in the United States for the treatment of lateral canthal lines, more commonly known as crow's feet. "We believe that Revance has designed the trial to succeed and remain relevant to patients' experiences," analyst Difei Yang wrote in a note. Yang said since the draft guidance is unlikely to be finalized this year, Revance should have a "fair shot" of convincing the FDA on use of its primary endpoints and electromyography (EMG) to provide proof on paralytic effects. "Given that the company expects to file a BLA and launch RT001 in 2018 and 2019 respectively, the regulatory meeting post Phase III results will be extremely important," Yang noted. The analyst highlighted that a "Phase IIb study of RT001 was assessed on an IGA-LCL and PGA scale of 0-4 (0=no visible wrinkles and 4=severe), which showed statistically significant results (44.4 percent vs. 0 percent of RT001 vs. placebo)." In the upcoming Phase III study, the analyst expects the percentage of patients with scores of 0 or 1 to be much smaller than the 44 percent (more in the range of 10-20 percent) based on the Botox data. "Though we do not expect RT-001 to match Botox on the efficacy side, as a topical formulation with lower penetration levels, it should outperform Botox on the safety side," Yang added. Shares of Revance closed Monday's regular trading session at $17.78, while Yang has a price target of $48, implying an upside of 170 percent.