Revance Therapeutics Inc RVNC has dropped 9 percent since the start of the year, but it's begun a path to redemption through a new, respected advocate.
The Rating
Goldman Sachs analysts Dana Flanders and Christopher Staral initiated coverage on Revance with a Buy rating and a $60 price target.
The Thesis
Revance’s injectable DaxibotulinumtoxinA will soon penetrate and rise in a $3 billion global neuromodulator market expected to post 11-percent compound annual growth through 2023.
Goldman Sachs foresees long-term opportunity in the treatment of glabellar lines, cervical dystonia and plantar fasciitis — expectations supported by physician surveys indicating a potential premium to Botox pricing and few challenges from Allergan plc Ordinary Shares AGN’s cosmetic portfolio.
The analysts forecast peak sales north of $1.1 billion, which may secure Revance looks from outside parties.
“Given the attractiveness of the global neuromodulator market […] and growth potential from label expansion opportunities for Daxi, we also see high likelihood of M&A interest in RVNC over time,” Flanders and Staral wrote in a note.
Risks to their thesis include slow commercial uptake, competition and regulatory roadblocks.
Price Action
Shares spiked 5.4 percent on the coverage initiation. At time of publication, Revance's stock traded up 1.9 percent off Monday's open at $31.90.
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