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Shares of Revance Therapeutics, Inc. (RVNC) dropped 33.1% in Friday’s extended trade and another 32% at the time of writing after the company announced that the Food and Drug Administration (FDA) declined to approve its injectable drug, DaxibotulinumtoxinA, to treat moderate to severe glabellar (frown) lines.
The biotechnology company engages in the development, manufacturing and commercialization of novel botulinum toxin products for multiple aesthetic and therapeutic applications. (See Revance stock charts on TipRanks)
FDA has reasoned that some shortcomings were identified in the Revance’s manufacturing facility during the onsite inspection. Notably, no product-related deficiencies have been mentioned in the Complete Response Letter. The company seeks to request a Type A meeting with the FDA to address the deficiencies.
The President and CEO of Revance, Mark Foley, said, “We are very disappointed by this unanticipated response from the FDA and are seeking further clarity from the agency. We remain committed to bringing our next-generation neuromodulator product to market in both aesthetic and therapeutic indications.”
Following the news, Mizuho Securities analyst Vamil Divan maintained a Buy rating on Revance and lowered the price target to $26 from $36. The new price target implies 14.5% upside potential from current level. (See Analysts’ Top Stocks on TipRanks)
Divan noted, “We spoke to management over the weekend and assume this will likely mean a delay of about 12-15 months, but also believe Daxi is still approvable and will ultimately have an important role in the aesthetics and therapeutic toxin market.”
Consensus among analysts is a Strong Buy based on 7 unanimous Buys. The average Revance price target of $25.50 implies upside potential of 12.3%.
Investors should always be aware of the risks involved in any stock. According to the new TipRanks’ Risk Factors tool, RVNC is at risk mainly because of three factors: Legal and Regulatory, Finance and Corporate, and Tech & Innovation, which contribute 28%, 22% and 21%, respectively, to the total 67 risks identified for the stock. Under the Legal & Regulatory risk category, Revance has 19 risks, details of which can be found on the TipRanks website.