Revance data erase frowns for now

Analysis

The case for Revance’s version of Botox is based entirely on the product’s ability to smooth out frown lines for longer than the competition. Keenly awaited phase III data appear to confirm that RT002 is indeed longer acting, sending shares in the company up 34% yesterday.

Assessing the size of the opportunity that awaits this upstart is tough, however, and perhaps most important is Allergan’s dominant position in the aesthetics market. The exact label that Revance wins will also be influential, while growing competition in the space should not be overlooked – particularly as there are new arrivals on the horizon that could be willing to compete aggressively on price.

Facing competition? Aesthetic botulin toxin products available around the world
    Annual sales ($m)
Product Primary company 2016 2019e 2022e
Botox Allergan 2,786 3,660 4,126
Dysport Ipsen 315 435 518
RT002 Revance Therapeutics - 29 244
Dysport (aesthetic)/Azzalure Nestlé 207 259 212
Xeomin Merz 48 62 73
DWP-450"/Nabota* Alphaeon (US & EU)/Daewoong  - 11 24'
BTXA/HengLi* HanAll BioPharma/Sinopharm not available
Meditoxin* Medytox not available
Botulax** Hugel/Croma Pharma not available
*Only available in certain Asian markets; "Alphaeon has filed DWP-450 in the US; **Croma is running phase III trials in the EU and US; 'sales refer to Daewoong only. Source: EvaluatePharma.

The table above, based on consensus sellside forecasts compiled by EvaluatePharma, shows just how dominant a position Allergan enjoys. With the ability to sell its range of aesthetic products in bundles, its grip on this market should not be understated. Attesting to this is the fact that Dysport and Xeomin, which are owned by considerably larger companies than Revance, have barely made a dent.

By 2020, which is when Revance is hoping to launch RT002 in glabellar lines, two more contenders could have made it to the all-important US market. 

Alphaeon filed an asset called DWP-450 with the FDA back in May in glabellar lines. The private US company, which was said to be trying to float a couple of years ago, acquired the asset with Evolus back in 2013.

Croma Pharma, a private Austrian company that owns various regional rights to Hugel’s product Botulax, is expected to file for the same approval in Europe and the US early next year. South Korea’s Hugel, which controls about 30% of its domestic botox market, has made no secret of its desire to pass on the US rights to Botulax to a larger partner.

The limited information available on these assets means nothing is certain here. However if all goes to plan for these companies and a price war develops, the outlook for Revance could shift significantly.

The edge?

Revance contends that its longer-lasting product will give it an edge, and the data released yesterday do seem to suggest that RT002 can keep a brow wrinkle free for several weeks longer than Botox.

Both trials hit their primary endpoint – a composite measure looking at the reduction in severity of glabellar lines – but secondary endpoints evaluating duration of effect are potentially more important. Here, the median duration of effect was 24 weeks for time to loss of none or mild wrinkle severity, while median duration for time to return to baseline wrinkle severity was around 27 weeks – and Revance presented several slides asserting that this result is superior to Botox.

Crucially, Revance needs to persuade the FDA to put this in the product’s label. The Botox label says its duration of action is three to four months and analysts believe RT002 needs a mention of six months for any hope of making this a differentiator.

That decision remains some way off – the next hurdle is a long-term safety study which will read out by year end. Crudely put, RT002 is a double dose of the toxin, and Revance must still show that this does not cause unwanted effects.

Business sense

Whatever label Revance wins, and no matter how many competitors are on the market, Allergan has a very strong base from which to protect its franchise. This fact more than any other dispels hopes that RT002 will be able to command a premium for a longer-acting product, and win a respectable share of the market.

This goal will be even harder to achieve if other competitors compete aggressively on price. Ironically, though, this scenario could also make the Revance bull case – that an Allergan takeover is on the horizon – more likely to materialise.

Launching a luxury, long-acting version of your flagship product for those that can shrug off the price tag, while leaving the rest of the market to fight for the scraps, might seem a cynical move. For a company like Allergan, it might sound like good business sense.

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