UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | | | | | | | |
| (Mark One) |
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2023March 31, 2024
or
| | | | | | | | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___ to ___
Commission File No. 001-36297
| | | | | | | | |
| | |
| Revance Therapeutics, Inc. |
| (Exact name of registrant as specified in its charter) | |
| | |
| | | | | | | | | | | |
| Delaware | 77-0551645 | |
| (State or other jurisdiction of
incorporation or organization) | (I.R.S. Employer Identification No.) | |
1222 Demonbreun Street, Suite 2000, Nashville, Tennessee, 37203
(Address, including zip code, of principal executive offices)
(615) 724-7755
(Registrant’s telephone number, including area code)
| | | | | | | | |
| Securities Registered Pursuant to Section 12(b) of the Act: |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.001 per share | RVNC | Nasdaq Global Market |
Indicate by check mark whether the registrantregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | |
| Large accelerated filer | ☒ | Accelerated filer | ☐ | Emerging growth company | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial statement accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
Number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of July 31, 2023: 87,955,357April 30, 2024: 104,448,502
Table of Contents
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DEFINED TERMS
Unless expressly indicated or the context requires otherwise, the terms “Revance,” “Company,” “we,” “us,” and “our,” in this Quarterly Report on Form 10-Q (this “Report”) refer to Revance Therapeutics, Inc., a Delaware corporation, and, where appropriate, its wholly-owned subsidiaries. We also have used several other terms in this Report, the condensed consolidated financial statements and accompanying notes included herein, most of which are explained or defined below.
“2014 EIP” means the Company’s 2014 Equity Incentive Plan.
“2014 ESPP” means the Company’s 2014 Employee Stock Purchase Plan.
“2014 IN” means the Company’s 2014 Inducement Plan.
“2020 ATM Agreement” means the Sales Agreement by and between Revance and Cowen, dated November 2020, and terminated on May 10, 2022.
“2022 ATM Agreement” means the Sales Agreement by and between Revance and Cowen, dated May 10, 2022.
“2027 Notes” means Revance’s 1.75% Convertible Senior Notes due 2027.
“ABPS” means Ajinomoto Althaea,Althea, Inc., doing business as Ajinomoto Bio-Pharma Services, a contract development and manufacturing organization.
“ABPS Services Agreement” means the Technology Transfer, Validation and Commercial Fill/Finish Services Agreement by and between the Company and ABPS, dated March 14, 2017, as amended on December 18, 2020.
“Adjusted Three-Month LIBOR” has the meaning set forth in the Note Purchase Agreement.
“Adjusted Three-Month Term SOFR” has the meaning set forth in the Note Purchase Agreement, as amended by the First Amendment.
“Allergan” means Allergan, Inc.
“Amortization Trigger” has the meaning set forth in the Note Purchase Agreement.
“ASC” means the Accounting Standards Codification as set forth by the Financial Accounting Standards Board.
“ASU” means Accounting Standards Update issued by the FASB.
“Athyrium” means Athyrium Buffalo LP.
“ATM” means at-the-market offering program.
“BLA” means a biologics license application.
“BTRX” means Botulinum Toxin Research Associates, Inc.
“CODM” means the chief operating decision maker.
“Consolidated Teoxane Distribution Net Product Sales” has the meaning set forth in the Note Purchase Agreement.
“consumers” means the patients of our aesthetic practice customers.
“Cowen” means Cowen and Company, LLC.
“CROs” means contract research organizations.
“DAXXIFY®” means (DaxibotulinumtoxinA-lanm) for injection.
“DAXXIFY® GL Approval” means the FDA approval in September 2022, of DAXXIFY® in the United States for the temporary improvement of moderate to severe glabellar lines in adults.
“DAXXIFY® GL Approval PSUs” means performance stock units that vested on the 6-month anniversary of the date of DAXXIFY® GL Approval.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Expansion Premises”FASB” means the additional 30,591 square feet added to the initial premises pursuant to the Nashville Lease.Financial Accounting Standards Board.
“FDA” means the United States Food and Drug Administration.
“Fintech Platform” means OPUL® and the HintMD Platform.
“First Amendment”means the first amendment to the Note Purchase Agreement, by and among the Company, HintMD and Athyrium, dated August 8, 2023.
“First Tranche” means the Notes Payable issued to the Purchasers in an aggregate principal amount of $100.0 million on March 18, 2022.
“Fosun” means Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd., a wholly-owned subsidiary of Shanghai Fosun Pharmaceutical (Group) Co., Ltd.
“Fosun License Agreement” means the License Agreement by and between Revance and Fosun, dated December 4, 2018, as amended on February 15, 2020.
“Fosun Territory” means mainland China, Hong Kong and Macau.
“FY2022FY2023 Form 10-K” means our Annual Report on Form 10-K for the year ended December 31, 2022,2023, which was filed with the SEC on February 28, 2023.
“GPV” means gross-processing volume of the Fintech Platform or the total dollar amount of all transactions processed in the period through the Fintech Platform, net of refunds.2024.
“HintMD” means Hint, Inc., our wholly owned subsidiary.
“HintMD Acquisition” means Revance’s acquisition of HintMD, completed on June 23, 2020.
“HintMD Plan” means the Hint, Inc. 2017 Equity Incentive Plan.
“HintMD Platform” means the legacy HintMD fintech platform.
“JPM” means JPMorgan Chase & Co., and its assigns.
“Indenture” means the indenture, by and between Revance and U.S. Bank National Association, as trustee, dated February 14, 2020.
“injector” means a professional licensed to inject our Products, including physicians.
“Maturity Date” means September 18, 2026, the maturity date of the Notes Payable set forth in the Note Purchase Agreement.
“Nashville Lease” means the office lease by and between Revance and 1222 Demonbreun, LP, dated November 19, 2020, as amended on January 4, 2021, July 1, 2021 and January 13, 2023.
“neuromodulator” means injectable botulinum toxins and neurotoxins.
“NMPA” means China’sChina's National Medical Products Administration.
“Note Purchase Agreement” means the note purchase agreement by and between Revance; Athyrium, as administrative agent; the Purchasers, including Athyrium; and HintMD, as a guarantor, dated March 18, 2022.
“Notes Payable” means notes payable by Revance pursuant to the Note Purchase Agreement.
“NPA Effective Date” means the effective date of the Note Purchase Agreement, March 18, 2022.
“onabotulinumtoxinA biosimilar” means a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®.
“option counterparties” means capped call transactions with a purchaserspurchaser and another financial institution.
“OPUL®” means the OPUL® Relational Commerce Platform.
“PAS” means prior approval supplement.
“PayFac” means payment facilitator.
“PCI” means PCI Pharma Services, formerly known as Lyophilization Services of New England, Inc., which was acquired by PCI in December 2021.
“PCI Supply Agreement” means the Commercial Supply Agreement by and between Revance and PCI, dated April 6, 2021.
“PDUFA” means Prescription Drug User Fee Act.
“POS” means point of sale.
“PrevU” means the early experience program for DAXXIFY®.
“Products” means DAXXIFY® and the RHA Collection® of dermal fillers.
“Product Segment” means the business that includes the research, development and commercialization of our Products and product candidates.
“PSA”PSAs” means a performance stock award.
“PSU”PSUs” means a performance stock unit.
“Purchasers” means Athyrium and its successors and assigns.
“RHA® Collection of dermal fillers” means RHA® 2, RHA® 3 and RHA® 4, which have been approved by the FDA for the correction of moderate to severe dynamic facial wrinkles and folds; and RHA® Redensity.
“RHA® Pipeline Products” means future hyaluronic acid filler advancements and products by Teoxane.
“RHA® Redensity” means a dermal filler, which has been approved by the FDA for the treatment of moderate to severe dynamic perioral rhytids (lip lines).
“RSAs” means restricted stock awards.
“RSUs” means restricted stock units.
“SEC” means the U.S. Securities and Exchange Commission.
“Second Expansion Premises”Tranche” means the additional 17,248 square feet addedNotes Payable issued to the current premises pursuant to the Nashville Lease.
“Second Tranche” meansPurchasers in an aggregate principal amount of $50.0 million in Notes Payable that remains available to Revance until September 18, 2023, subject to the satisfaction of certain conditions set forth in the Note Purchase Agreement.on August 28, 2023.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Services” means the Fintech Platform business.
“Service Segment” means the business that includes the development and commercialization of the Fintech Platform.
“SOFR” has the meaning set forth in the Note Purchase Agreement, as amended by the First Amendment.
“stock awards” means RSAs, PSAs, RSUs and PSUs.
“Third Tranche” means the uncommitted tranche of additional Notes Payable in an aggregate amount of up to $150.0 million, which was available until March 31, 2024, subject to the satisfaction of certain conditions set forth in the Note Purchase Agreement.
“Teoxane” means Teoxane SA.
“Teoxane Agreement” means the exclusive distribution agreement by and between Revance and Teoxane, dated January 10, 2020, as amended on September 30, 2020, December 22, 2020 and December 22, 2022.
“U.S. GAAP” means U.S. generally accepted accounting principles.
“Viatris” means Viatris Inc., formerly known as Mylan Ireland Ltd.
“Viatris Agreement” means the Collaboration and License Agreement by Revance and Viatris, dated February 28, 2018, as amended on August 22, 2019.
“Viatris Territory” means world-wide (excluding Japan).
“Zero-cost Inventory” means DAXXIFY® inventory produced prior to the DAXXIFY® GL Approval in early September 2022, for which the related manufacturing costs were incurred and expensed to research and development expense prior to the FDA approval.
Revance®, the Revance logos, DAXXIFY®, OPUL® and other trademarks or service marks of Revance appearing in this Report are the property of Revance. This Report contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements (Unaudited)
REVANCE THERAPEUTICS, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited) | | | | June 30, | | December 31, | | March 31, 2024 | | December 31, |
| | | 2023 | | 2022 | | 2024 | | 2023 |
| ASSETS | ASSETS | ASSETS |
| CURRENT ASSETS | CURRENT ASSETS | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 141,235 | | | $ | 108,965 | |
| Cash and cash equivalents | |
| Cash and cash equivalents | |
| Restricted cash, current | Restricted cash, current | 275 | | | — | |
| Short-term investments | Short-term investments | 178,488 | | | 231,742 | |
| Accounts receivable, net | Accounts receivable, net | 17,043 | | | 11,339 | |
| Inventories | Inventories | 34,448 | | | 18,325 | |
| Prepaid expenses and other current assets | Prepaid expenses and other current assets | 7,458 | | | 4,356 | |
| Current assets of discontinued operations | |
| Total current assets | Total current assets | 378,947 | | | 374,727 | |
| Property and equipment, net | Property and equipment, net | 12,690 | | | 13,799 | |
| Goodwill | 77,175 | | | 77,175 | |
| Intangible assets, net | Intangible assets, net | 28,461 | | | 35,344 | |
| Operating lease right-of-use assets | Operating lease right-of-use assets | 34,438 | | | 39,223 | |
| Finance lease right-of-use asset | Finance lease right-of-use asset | 26,460 | | | 6,393 | |
| Restricted cash, non-current | Restricted cash, non-current | 7,145 | | | 6,052 | |
| Finance lease prepaid expense | Finance lease prepaid expense | 27,500 | | | 27,500 | |
| Other non-current assets | Other non-current assets | 4,719 | | | 1,687 | |
| Non-current assets of discontinued operations | |
| TOTAL ASSETS | TOTAL ASSETS | $ | 597,535 | | | $ | 581,900 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | LIABILITIES AND STOCKHOLDERS’ DEFICIT | | LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| CURRENT LIABILITIES | CURRENT LIABILITIES | |
| Accounts payable | |
| Accounts payable | |
| Accounts payable | Accounts payable | $ | 8,345 | | | $ | 4,546 | |
| Accruals and other current liabilities | Accruals and other current liabilities | 39,535 | | | 59,357 | |
| Deferred revenue, current | Deferred revenue, current | 5,433 | | | 6,867 | |
| Operating lease liabilities, current | |
| Finance lease liability, current | Finance lease liability, current | 15,505 | | | 669 | |
| Operating lease liabilities, current | 5,261 | | | 4,243 | |
| Debt, current | |
| Current liabilities of discontinued operations | |
| Total current liabilities | Total current liabilities | 74,079 | | | 75,682 | |
| Debt, non-current | Debt, non-current | 380,348 | | | 379,374 | |
| Deferred revenue, non-current | Deferred revenue, non-current | 82,213 | | | 78,577 | |
| Operating lease liabilities, non-current | Operating lease liabilities, non-current | 31,274 | | | 34,182 | |
| Other non-current liabilities | Other non-current liabilities | 2,835 | | | 1,485 | |
| TOTAL LIABILITIES | TOTAL LIABILITIES | 570,749 | | | 569,300 | |
Commitments and Contingencies (Note 11) | | | |
| STOCKHOLDERS’ EQUITY | |
| Preferred stock, par value $0.001 per share — 5,000,000 shares authorized, and no shares issued and outstanding as of June 30, 2023 and December 31, 2022 | — | | | — | |
| Common stock, par value $0.001 per share — 190,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 87,949,987 and 82,385,810 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 88 | | | 82 | |
Commitments and Contingencies (Note 12) | | Commitments and Contingencies (Note 12) | | | |
| STOCKHOLDERS’ EQUITY (DEFICIT) | |
| Preferred stock, par value $0.001 per share — 5,000,000 shares authorized, and no shares issued and outstanding as of March 31, 2024 and December 31, 2023 | |
| Preferred stock, par value $0.001 per share — 5,000,000 shares authorized, and no shares issued and outstanding as of March 31, 2024 and December 31, 2023 | |
| Preferred stock, par value $0.001 per share — 5,000,000 shares authorized, and no shares issued and outstanding as of March 31, 2024 and December 31, 2023 | |
| Common stock, par value $0.001 per share — 190,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 104,409,798 and 87,962,765 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | |
| Additional paid-in capital | Additional paid-in capital | 1,908,244 | | | 1,767,266 | |
| Accumulated other comprehensive loss | (61) | | | (374) | |
| Accumulated other comprehensive gain (loss) | |
| Accumulated deficit | Accumulated deficit | (1,881,485) | | | (1,754,374) | |
| TOTAL STOCKHOLDERS’ EQUITY | 26,786 | | | 12,600 | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 597,535 | | | $ | 581,900 | |
| TOTAL STOCKHOLDERS’ DEFICIT | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
| | | | Three Months Ended June 30, | | Six Months Ended June 30, | | Three Months Ended March 31, |
| | | 2023 | | 2022 | | 2023 | | 2022 | | 2024 | | 2023 |
| Revenue: | Revenue: | | | | | | | |
| Product revenue | $ | 54,393 | | | $ | 25,483 | | | $ | 100,051 | | | $ | 46,320 | |
| Service revenue | 3,721 | | | 1,226 | | | 7,278 | | | 2,082 | |
| Product revenue, net | |
| Product revenue, net | |
| Product revenue, net | |
| Collaboration revenue | Collaboration revenue | 20 | | | 1,659 | | | 136 | | | 5,227 | |
| Total revenue | 58,134 | | | 28,368 | | | 107,465 | | | 53,629 | |
| Total revenue, net | |
| Operating expenses: | Operating expenses: | |
| Cost of product revenue (exclusive of depreciation and amortization) | 17,607 | | | 8,121 | | | 30,094 | | | 15,449 | |
| Cost of service revenue (exclusive of amortization) | 3,700 | | | 1,402 | | | 7,384 | | | 1,967 | |
| Cost of product revenue (exclusive of amortization) | |
| Cost of product revenue (exclusive of amortization) | |
| Cost of product revenue (exclusive of amortization) | |
| Selling, general and administrative | Selling, general and administrative | 77,384 | | | 47,847 | | | 143,395 | | | 92,922 | |
| Research and development | Research and development | 22,807 | | | 24,913 | | | 45,984 | | | 55,642 | |
| Depreciation and amortization | 2,135 | | | 3,927 | | | 4,139 | | | 7,712 | |
| Amortization | |
| Total operating expenses | Total operating expenses | 123,633 | | | 86,210 | | | 230,996 | | | 173,692 | |
| Loss from operations | (65,499) | | | (57,842) | | | (123,531) | | | (120,063) | |
| Loss from continuing operations | |
| Interest income | Interest income | 3,148 | | | 619 | | | 6,118 | | | 695 | |
| Interest expense | Interest expense | (4,368) | | | (3,874) | | | (8,865) | | | (5,805) | |
| Other expense, net | Other expense, net | (599) | | | (338) | | | (833) | | | (604) | |
| | Net loss | (67,318) | | | (61,435) | | | (127,111) | | | (125,777) | |
| Net loss from continuing operations | |
| | Net loss from continuing operations | |
| | Net loss from continuing operations | |
| Net loss from discontinued operations | |
| Total net loss | |
| Unrealized gain (loss) | Unrealized gain (loss) | 64 | | | (327) | | | 313 | | | (368) | |
| Comprehensive loss | Comprehensive loss | $ | (67,254) | | | $ | (61,762) | | | $ | (126,798) | | | $ | (126,145) | |
| Basic and diluted net loss | $ | (67,318) | | | $ | (61,435) | | | $ | (127,111) | | | $ | (125,777) | |
| Basic and diluted net loss per share | $ | (0.80) | | | $ | (0.88) | | | $ | (1.54) | | | $ | (1.82) | |
| | Basic and diluted net loss per share: | |
| | Basic and diluted net loss per share: | |
| | Basic and diluted net loss per share: | |
| Continuing operations | |
| Continuing operations | |
| Continuing operations | |
| Discontinued operations | |
| Total net loss per basic and diluted share | |
| | Basic and diluted weighted-average number of shares used in computing net loss per share | Basic and diluted weighted-average number of shares used in computing net loss per share | 83,685,919 | | | 70,061,457 | | | 82,417,064 | | | 69,202,062 | |
| Basic and diluted weighted-average number of shares used in computing net loss per share | |
| Basic and diluted weighted-average number of shares used in computing net loss per share | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(In thousands, except share and per share amounts)
(Unaudited)
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | Shares | | Amount |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
| 2024 | | | 2024 | | 2023 |
| Shares | | | Shares | | Amount | | Shares | | Amount |
| Preferred Stock | Preferred Stock | — | | | $ | — | | | — | | | $ | — | | | — | | | $ | — | | | — | | | $ | — | |
| Common Stock | Common Stock | |
| Balance — Beginning of period | Balance — Beginning of period | 84,017,208 | | | 84 | | | 71,763,765 | | | 72 | | | 82,385,810 | | | 82 | | | 71,584,057 | | | 72 | |
| Issuance of common stock related to ATM | 3,223,767 | | | 3 | | | 1,264,783 | | | 1 | | | 3,223,767 | | | 3 | | | 1,734,853 | | | 1 | |
| Issuance of common stock related to stock awards | 513,443 | | | 1 | | | — | | | — | | | 1,720,310 | | | 2 | | | — | | | — | |
| Issuance of common stock related to 2014 ESPP | 157,313 | | | — | | | 171,824 | | | — | | | 157,313 | | | — | | | 171,824 | | | — | |
| Balance — Beginning of period | |
| Balance — Beginning of period | |
| Issuance of common stock in connection with follow-on offering | |
| Issuance of common stock related to stock awards, net of cancellation | |
| Issuance of common stock upon exercise of stock options | Issuance of common stock upon exercise of stock options | 109,185 | | | — | | | 11,234 | | | — | | | 671,224 | | | 1 | | | 30,634 | | | — | |
| Cancellation of stock awards, net of issuance | (52,874) | | | — | | | (63,711) | | | — | | | (71,493) | | | — | | | (212,859) | | | — | |
| Shares withheld related to net settlement of stock awards | Shares withheld related to net settlement of stock awards | (18,055) | | | — | | | (24,532) | | | — | | | (136,944) | | | — | | | (185,146) | | | — | |
| Balance — End of period | Balance — End of period | 87,949,987 | | | 88 | | | 73,123,363 | | | 73 | | | 87,949,987 | | | 88 | | | 73,123,363 | | | 73 | |
| Additional Paid-In Capital | Additional Paid-In Capital | |
| Balance — Beginning of period | Balance — Beginning of period | — | | | 1,787,535 | | | — | | | 1,487,822 | | | — | | | 1,767,266 | | | — | | | 1,466,369 | |
| Issuance of common stock related to ATM, net of commissions and issuance costs | — | | | 99,956 | | | — | | | 22,661 | | | — | | | 99,956 | | | — | | | 31,585 | |
| Issuance of common stock related to 2014 ESPP | — | | | 2,455 | | | — | | | 2,018 | | | — | | | 2,455 | | | — | | | 2,018 | |
| Balance — Beginning of period | |
| Balance — Beginning of period | |
| Issuance of common stock in connection with follow-on offering, net of underwriting discounts and offering costs | |
| Issuance of common stock upon exercise of stock options | Issuance of common stock upon exercise of stock options | — | | | 2,034 | | | — | | | 30 | | | — | | | 11,515 | | | — | | | 109 | |
| Shares withheld related to net settlement of stock awards | Shares withheld related to net settlement of stock awards | — | | | (564) | | | — | | | (383) | | | — | | | (4,294) | | | — | | | (2,760) | |
| Issuance of common stock related to stock awards | — | | | (1) | | | — | | | — | | | — | | | (2) | | | — | | | — | |
| Issuance of common stock related to stock awards, net of cancellation | |
| Stock-based compensation | Stock-based compensation | — | | | 16,829 | | | — | | | 9,379 | | | — | | | 31,318 | | | — | | | 23,742 | |
| Other | Other | — | | | — | | | — | | | (116) | | | — | | | 30 | | | — | | | 348 | |
| Balance — End of period | Balance — End of period | — | | | $ | 1,908,244 | | | — | | | $ | 1,521,411 | | | — | | | $ | 1,908,244 | | | — | | | $ | 1,521,411 | |
| Other Accumulated Comprehensive Gain (loss) | |
| Balance — Beginning of period | |
| Balance — Beginning of period | |
| Balance — Beginning of period | |
| Unrealized gain (loss) | |
| Balance — End of period | |
| Accumulated Deficit | |
| Balance — Beginning of period | |
| Balance — Beginning of period | |
| Balance — Beginning of period | |
| Net loss | |
| Balance — End of period | |
| Total Stockholders’ Deficit | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) — (Continued)
(In thousands, except share and per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | Shares | | Amount |
| Other Accumulated Comprehensive Loss | | | | | | | | | | | | | | | |
| Balance — Beginning of period | — | | | (125) | | | — | | | (59) | | | — | | | (374) | | | — | | | (18) | |
| Unrealized gain (loss) | — | | | 64 | | | — | | | (327) | | | — | | | 313 | | | — | | | (368) | |
| Balance — End of period | — | | | (61) | | | — | | | (386) | | | — | | | (61) | | | — | | | (386) | |
| Accumulated Deficit | | | | | | | | | | | | | | | |
| Balance — Beginning of period | — | | | (1,814,167) | | | — | | | (1,462,294) | | | — | | | (1,754,374) | | | — | | | (1,397,952) | |
| Net loss | — | | | (67,318) | | | — | | | (61,435) | | | — | | | (127,111) | | | — | | | (125,777) | |
| Balance — End of period | — | | | (1,881,485) | | | — | | | (1,523,729) | | | — | | | (1,881,485) | | | — | | | (1,523,729) | |
| Total Stockholders’ Equity (Deficit) | 87,949,987 | | | $ | 26,786 | | | 73,123,363 | | | $ | (2,631) | | | 87,949,987 | | | $ | 26,786 | | | 73,123,363 | | | $ | (2,631) | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| | | | Six Months Ended June 30, | | Three Months Ended March 31, |
| | | 2023 | | 2022 | | 2024 | | 2023 |
| CASH FLOWS FROM OPERATING ACTIVITIES | CASH FLOWS FROM OPERATING ACTIVITIES | | | |
| Net loss | $ | (127,111) | | | $ | (125,777) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| Total net loss | |
| Total net loss | |
| Total net loss | |
| Adjustments to reconcile total net loss to net cash used in operating activities: | |
| Stock-based compensation | |
| Stock-based compensation | |
| Stock-based compensation | Stock-based compensation | 28,681 | | | 23,626 | |
| Depreciation and amortization | Depreciation and amortization | 10,149 | | | 11,985 | |
| Amortization of debt discount and debt issuance costs | Amortization of debt discount and debt issuance costs | 1,035 | | | 834 | |
| Amortization of discount on investments | Amortization of discount on investments | (3,197) | | | (14) | |
| Amortization of finance lease right-of-use asset | |
| Other non-cash operating activities | Other non-cash operating activities | 498 | | | 295 | |
| Changes in operating assets and liabilities: | Changes in operating assets and liabilities: | |
| Accounts receivable | |
| Accounts receivable | |
| Accounts receivable | Accounts receivable | (5,704) | | | (2,242) | |
| Inventories | Inventories | (11,652) | | | (3,446) | |
| Prepaid expenses and other current assets | Prepaid expenses and other current assets | (3,102) | | | 12 | |
| Lease right-of-use assets | Lease right-of-use assets | (18,949) | | | (16,018) | |
| Other non-current assets | Other non-current assets | (3,093) | | | (454) | |
| Accounts payable | Accounts payable | 3,703 | | | 1,975 | |
| Accruals and other liabilities | Accruals and other liabilities | (19,536) | | | (12,138) | |
| Deferred revenue | Deferred revenue | 2,202 | | | (3,243) | |
| Lease liabilities | Lease liabilities | 21,844 | | | 17,908 | |
| Other non-current liabilities | Other non-current liabilities | 1,350 | | | 1,202 | |
| Net cash used in operating activities | Net cash used in operating activities | (122,882) | | | (105,495) | |
| CASH FLOWS FROM INVESTING ACTIVITIES | CASH FLOWS FROM INVESTING ACTIVITIES | |
| Purchases of investments | |
| Purchases of investments | |
| Purchases of investments | |
| Finance lease prepayments | |
| Purchases of property and equipment | |
| Proceeds from maturities of investments | Proceeds from maturities of investments | 185,247 | | | 113,183 | |
| Purchases of investments | (128,859) | | | (163,676) | |
| Purchases of property and equipment | (604) | | | (920) | |
| Finance lease prepayments | — | | | (9,900) | |
| Net cash provided by (used in) investing activities | Net cash provided by (used in) investing activities | 55,784 | | | (61,313) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | CASH FLOWS FROM FINANCING ACTIVITIES | |
| Proceeds from issuance of common stock in connection with ATM, net of commissions | 100,183 | | | 31,814 | |
| Proceeds from the exercise of stock options and employee stock purchase plan | 13,970 | | | 2,127 | |
| Proceeds from issuance of common stock in connection with follow-on offering, net of underwriting discounts | |
| Proceeds from issuance of common stock in connection with follow-on offering, net of underwriting discounts | |
| Proceeds from issuance of common stock in connection with follow-on offering, net of underwriting discounts | |
| Proceeds from the exercise of stock options | |
| Principal payments on finance lease obligations | |
| Taxes paid related to net settlement of stock awards | Taxes paid related to net settlement of stock awards | (4,294) | | | (2,760) | |
| Principal payments on finance lease obligations | (8,899) | | | (1,760) | |
| Payment of debt issuance costs and offering costs | (224) | | | (1,441) | |
| Proceeds from issuance of notes payable, net of debt discount | — | | | 98,150 | |
| Other financing activities | — | | | 348 | |
| Payment of offering costs | |
| Net cash provided by financing activities | Net cash provided by financing activities | 100,736 | | | 126,478 | |
| NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 33,638 | | | (40,330) | |
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period | 115,017 | | | 115,669 | |
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period | $ | 148,655 | | | $ | 75,339 | |
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period(1) | |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period(1) | |
(1)Cash, cash equivalents, and restricted cash included $0.9 million of restricted cash classified as current assets of discontinued operations as of March 31, 2024, and non-current assets of discontinued operations as of December 31, 2023 on condensed consolidated balance sheets.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. The Company and Summary of Significant Accounting Policies
Overview
Revance is a biotechnology company focused on developing and commercializing innovative aesthetic and therapeutic offerings. Revance’s aesthetics portfolio includes DAXXIFY® (DaxibotulinumtoxinA-lanm) for injection the RHA® Collection of dermal fillers from Teoxane and OPUL®, a relational commerce platform for aesthetic practices. Revance has also partnered with Viatris to develop an onabotulinumtoxinA biosimilar, which would compete in the existing short-acting neuromodulator marketplace. Revance’s therapeutics pipeline is currently focused on muscle movement disorders, including evaluating DAXXIFY® in two debilitating conditions, cervical dystonia and upper limb spasticity.
Liquidity and Financial Condition
Since our inception, most of our resources have been dedicated to the research, development, manufacturing development, regulatory approval and/or commercialization of our Products and Services. We began generating revenue from commercial sales in July 2020 when we acquired the HintMD Platform, followed by the launch of the RHA® Collection of dermal fillers in August 2020. Although we receivedthe U.S. Revance has also partnered with Viatris to develop a biosimilar to onabotulinumtoxinA for injection and Fosun to commercialize DAXXIFY® GL Approval,in China.
Liquidity and Financial Condition
We are not profitable and have incurred losses in each year since our inception. For the three months ended March 31, 2024, we had a total net loss of $53.2 million and an accumulated deficit of $2.1 billion. Although we generate revenue from the sale of our Products, we expect to continue to incur GAAP operating losses for the foreseeable future. For the three and six months ended June 30, 2023, we had a net loss of $67.3 million and $127.1 million.
As of June 30, 2023,March 31, 2024, we had a working capital surplus of $304.9$300.8 million and an accumulated deficitcapital resources of $1.9 billion. In recent years,$277.1 million consisting of cash, cash equivalents, and short-term investments. To date, we have funded our operations primarily through the sale of common stock, convertible senior notes, sales of Products, proceeds from notes issued pursuant to the Note Purchase Agreement, and payments received from collaboration arrangements. As of June 30, 2023, we had capital resources of $319.7 million consisting of cash, cash equivalents, and short-term investments. On or before August 31, 2023, the Company expects to issue to the purchasers under the Note Purchase Agreement notes in an aggregate principal amount of $50.0 million, provided certain conditions are met. We also have a remaining capacity to sell up to $47.2 million of our common stock under the 2022 ATM Agreement as of June 30, 2023.March 31, 2024. We believe that our existing capital resources along with our ability to draw on the Second Tranche will be sufficient to fund the operating plan through at least the next 12 months following the issuance of the condensed consolidated financial statements.statements in this Report.
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements are unaudited, and reflect all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the interim periods presented.
Our condensed consolidated balance sheet for the year ended December 31, 20222023 was derived from audited consolidated financial statements, but does not include all disclosures including notes required by U.S. GAAP. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2023,2024, or any other future period. Our condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements contained in our FY2022FY2023 Form 10-K.
Our condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries, and have been prepared in conformity with U.S. GAAP. All intercompany transactions have been eliminated.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Reclassification
At the beginning of 2023, we changed our presentation of internal-use software where approximately $8.3 million has been reclassified from property and equipment, net into intangible assets, net. Refer to Fintech Platform business (Note 42) as a discontinued operation were met in the first quarter of 2024. As a result, the Fintech Platform business is presented in the condensed consolidated statement of operations and condensed consolidated balance sheet as discontinued operations for further detailall periods presented. Unless indicated otherwise, the information in the notes to the condensed consolidated financial statements relates to continuing operations. The Company operates under one reportable segment as a result of June 30, 2023 and December 31, 2022.discontinuing the Service Segment.Use of Estimates & Risks and Uncertainties
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, the incremental borrowing rate used to measure operating lease and finance lease liabilities, the recoverability of goodwill and long-lived assets, useful lives associated with property and equipment and intangible assets, the period of benefit associated with deferred costs, revenue recognition (including the timing of satisfaction of performance obligations, estimating variable consideration, estimating stand-alone selling prices of promised goods and services, and allocation of transaction price to performance obligations), deferred revenue classification, accruals for clinical trial costs, valuation and assumptions underlying stock-based compensation and other equity instruments, and income taxes.
As of the date of issuance of these condensed consolidated financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our condensed consolidated financial statements.
Significant Accounting Policies
There have been no material changes to our significant accounting policies from our FY2022FY2023 Form 10-K.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This standard requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280, on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024, with early adoptions permitted. We are currently evaluating the impact of adopting ASU 2023-07.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). ASU 2023-09 improves reporting for income taxes, primarily by requiring disclosure of specific categories in the tax rate reconciliation and providing additional annual information for reconciling items that meet a quantitative threshold. The recent accounting pronouncements did notamendments in ASU 2023-09 also require additional annual information regarding income taxes paid, as well as other additional disclosures. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, early adoption is permitted. We are currently evaluating the effect the amendments in ASU 2023-09 will have any material impact on our tax disclosures.
In March 2024, the financialSEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors, which requires registrants to provide certain climate-related information in their registration statements unless otherwise disclosed, and we do not believeannual reports. The rules require information about a registrant's climate-related risks that there are any other new accounting pronouncements that have been issued that mightreasonably likely to have a material impact on ourits business, results of operations, or financial condition. In addition, the rules will require registrants to present orcertain climate-related financial metrics in the audited financial statements. These requirements are effective for the Company in various fiscal years, starting with its fiscal year beginning January 1, 2025. Disclosures will be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing. In April 2024, the SEC determined to voluntarily stay the final rules pending the outcome of certain legal challenges. We are currently evaluating the impact of these final rules on future financial statements.reporting requirements and related disclosures.
2. RevenueExit of the Fintech Platform Business
In September 2023, we commenced a plan to exit the Fintech Platform business as the costs and resources required to support the Fintech Platform no longer aligned with the Company’s capital allocation priorities. The exit and restructuring activities included elimination of Fintech Platform personnel, the termination of Fintech Platform research and development activities and an elimination of outside services expenses related to the Fintech Platform. Based on such plan, substantially all
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
payment processing activities for Fintech Platform customers ended on January 31, 2024 and we substantially completed the remaining activities to wind-down the Fintech Platform operations as of March 31, 2024.
Our revenue is primarily generated from U.S. customers. Our productIn accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, the substantial completion of exit of the Fintech Platform business represents a strategic shift that has a major effect on the Company’s operations and collaboration revenues are generated from the Product Segment, and our service revenue is generated fromfinancial results. The Fintech Platform business was historically reported as the Service Segment (Note 12). The following table presentsSegment. As a result, the results of our revenue disaggregated by timingFintech Platform business have been reflected as discontinued operations in our condensed consolidated financial statements. Our condensed consolidated balance sheet and condensed consolidated statement of transferoperations and comprehensive loss includes reclassification of goods or service:certain prior year figures to conform to the current period presentation.
| | | | | | | | | | | |
| | March 31, | | December 31, |
| (in thousands) | 2024 | | 2023 |
| Restricted cash, current | $ | 875 | | $ | — |
| Accounts receivable, net | — | | 16 |
| Prepaid expenses and other current assets | 1,735 | | 1,837 |
| Total current assets of discontinued operations | $ | 2,610 | | $ | 1,853 |
| | | |
| Intangible assets, net | $ | — | | $ | 538 |
| Restricted cash, non-current | — | | 875 |
| Total non-currents assets of discontinued operations | $ | — | | $ | 1,413 |
| | | |
| Accounts payable | $ | — | | $ | 255 |
Accruals and other current liabilities | 1,406 | | 961 |
Total current liabilities of discontinued operations (1) | $ | 1,406 | | $ | 1,216 |
(1)Amount represents severance and personnel liabilities related to the exit of the Fintech Platform business. We substantially completed the restructuring activities as of March 31, 2024. Prior to the issuance of the condensed consolidated financial statements in this Report, $0.9 million was paid and the remaining $0.5 million will be paid over time through the third quarter of 2024. A summary of severance and personnel liabilities related to the exit of the Fintech Platform business, included within current liabilities of discontinued operations on the consolidated balance sheet, is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2023 | | Six Months Ended June 30, 2023 |
| Transferred | | Transferred |
| (in thousands) | at a point in time | | over time | | Total | | at a point in time | | over time | | Total |
| Product revenue | $ | 54,393 | | | $ | — | | | $ | 54,393 | | | $ | 100,051 | | | $ | — | | | $ | 100,051 | |
| Service revenue | 2 | | | 3,719 | | | 3,721 | | | 59 | | | 7,219 | | | 7,278 | |
| Collaboration revenue | — | | | 20 | | | 20 | | | — | | | 136 | | | 136 | |
| Total revenue | $ | 54,395 | | | $ | 3,739 | | | $ | 58,134 | | | $ | 100,110 | | | $ | 7,355 | | | $ | 107,465 | |
| | | | | |
| (in thousands) |
| Balance on December 31, 2023 | $ | 917 | |
| Severance and other personnel costs | 766 | |
| Cash payments during the period | (277) | |
| Balance on March 31, 2024 | $ | 1,406 | |
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2022 | | Six Months Ended June 30, 2022 |
| Transferred | | Transferred |
| (in thousands) | at a point in time | | over time | | Total | | at a point in time | | over time | | Total |
| Product revenue | $ | 25,483 | | | $ | — | | | $ | 25,483 | | | $ | 46,320 | | | $ | — | | | $ | 46,320 | |
| Service revenue | 148 | | | 1,078 | | | 1,226 | | | 239 | | | 1,843 | | | 2,082 | |
| Collaboration revenue | — | | | 1,659 | | | 1,659 | | | — | | | 5,227 | | | 5,227 | |
| Total revenue | $ | 25,631 | | | $ | 2,737 | | | $ | 28,368 | | | $ | 46,559 | | | $ | 7,070 | | | $ | 53,629 | |
Product Revenue
Our product revenue breakdown is summarized below: | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| (in thousands) | 2023 | | 2022 | | 2023 | | 2022 |
| Product: | | | | | | | |
RHA® Collection of dermal fillers | $ | 31,767 | | | $ | 25,483 | | | $ | 62,047 | | | $ | 46,320 | |
DAXXIFY® | 22,626 | | | — | | | 38,004 | | | — | |
| Total product revenue | $ | 54,393 | | | $ | 25,483 | | | $ | 100,051 | | | $ | 46,320 | |
Accounts receivables and contract liabilitiesDetails of loss from contracts with our product customersdiscontinued operations are as follows:
| | | | | | | | | | | |
| June 30, | | December 31, |
| (in thousands) | 2023 | | 2022 |
| Accounts receivables: | | | |
| Accounts receivable, net | $ | 16,878 | | | $ | 10,966 | |
| Total accounts receivable, net | $ | 16,878 | | | $ | 10,966 | |
| | | |
| Contract liabilities: | | | |
| Deferred revenue, current | $ | 471 | | | $ | 705 | |
| Total contract liabilities | $ | 471 | | | $ | 705 | |
| | | | | | | | | | | |
| | Three Months Ended March 31, |
| (in thousands) | 2024 | | 2023 |
| Service revenue | $ | 426 | | | $ | 3,557 | |
| Operating expenses: | | | |
| Cost of service revenue (exclusive of amortization) | 316 | | | 3,684 | |
Selling, general and administrative (1) | 2,073 | | | 4,091 | |
Research and development (1) | 1,664 | | | 5,645 | |
| Amortization | — | | | 1,459 | |
| Net loss from discontinued operations | $ | (3,627) | | | $ | (11,322) | |
Service(1)The restructuring charges are included in the results of discontinued operations for the periods of our condensed consolidated financial statements presented in this Report. A summary of our restructuring charges included within our consolidated statement of operations for the three months ended March 31, 2024 were as follows:
| | | | | |
| (in thousands) |
| Research and development | $ | 412 | |
| Selling, general and administrative | 354 | |
| Total restructuring charges | $ | 766 | |
As of March 31, 2024, we have recorded total restructuring charges of $3.6 million and impairment charges of $93.2 million in connection with the exit of the Fintech Platform business.
The cash flows related to discontinued operations have not been segregated and are included in the condensed consolidated statements of cash flows. Significant non-cash activities related to discontinued operations are as follows:
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2024 | | 2023 |
| Operating activities: | | | |
| Stock-based compensation | $ | 227 | | | $ | 2,130 | |
| Depreciation and amortization | $ | 538 | | | $ | 2,104 | |
3. Revenue
We offer customer payment processing and certain value-added services to aesthetic practices through the Fintech Platform. Generally,Our revenue related to the HintMD Platform payment processing service, was recognizedis primarily generated from U.S. customers. Our product revenue is generated by transferring goods at a point in time and our collaboration revenue related to the OPUL® payment processing service is recognizedgenerated over time. The migration of the remaining HintMD customers to OPUL
Product Revenue, net
® was completed during the three months ended June 30, 2023. For the Fintech Platform,Our product revenue, related to the value-added services componentnet breakdown is recognized over time.summarized below:
Accounts receivable from contracts with our service customers are as follows:
| | | | | | | | | | | |
| June 30, | | December 31, |
| (in thousands) | 2023 | | 2022 |
| Accounts receivable: | | | |
| Accounts receivable, net | $ | 165 | | | $ | 59 | |
| | | |
| | | |
| | | |
| | | |
| Total accounts receivable, net | $ | 165 | | | $ | 59 | |
| | | |
| | | |
| | | |
| | | |
| | | | | | | | | | | |
| Three Months Ended March 31, |
| (in thousands) | 2024 | | 2023 |
| Product: | | | |
RHA® Collection of dermal fillers | $ | 29,570 | | | $ | 30,280 | |
DAXXIFY® | 22,149 | | | 15,378 | |
| Total product revenue, net | $ | 51,719 | | | $ | 45,658 | |
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
| | | | | | | | | | | |
| March 31, | | December 31, |
| (in thousands) | 2024 | | 2023 |
| Accounts receivable: | | | |
| Accounts receivable, gross | $ | 30,968 | | | $ | 27,975 | |
| Allowance for doubtful accounts | (1,081) | | | (950) | |
| Total accounts receivable, net | $ | 29,887 | | | $ | 27,025 | |
| | | |
| Contract liabilities: | | | |
| Deferred revenue, current | $ | 455 | | | $ | 884 | |
| Total contract liabilities | $ | 455 | | | $ | 884 | |
Collaboration Revenue
Viatris Agreement
Agreement Terms
We entered into the Viatris Agreement in February 2018, pursuant to which we are collaborating with Viatris exclusively, in the Viatris Territory, to develop, manufacture, and commercialize an onabotulinumtoxinA biosimilar.
Viatris has paid us an aggregate of $60 million in non-refundable upfront and milestone fees as of June 30, 2023,March 31, 2024, and the agreement provides for additional remaining contingent payments of up to $70 million in the aggregate, upon the achievement of certain clinical and regulatory milestones and of specified, tiered sales milestones of up to $225 million. The payments do not represent a financing component for the transfer of goods or services. In addition, Viatris is required to pay us low to mid-double digit royalties on any sales of the biosimilar in the U.S., mid-double digit royalties on any sales in Europe, and high single digit royalties on any sales in other ex-U.S. Viatris territories. However, we have agreed to waive royalties for U.S. sales, up to a maximum of $50 million in annual sales, during the first approximately four years after commercialization to defray launch costs.
Revenue Recognition
We estimated the transaction price for the Viatris Agreement using the most likely amount method within the scope of ASC 606. In order to determine the transaction price, we evaluated all of the payments to be received during the duration of the contract, which included milestones and consideration payable by Viatris. Other than the upfront payment, all other milestones and consideration we may earn under the Viatris Agreement are subject to uncertainties related to development achievements, Viatris’ rights to terminate the agreement, and estimated effort for cost-sharing payments. Components of such estimated effort for cost-sharing payments include both internal and external costs. Consequently, the transaction price does not include any milestones and considerations that, if included, could result in a probable significant reversal of revenue when related uncertainties become resolved. At the end of each reporting period, we re-evaluate the probability of achievement of each such milestone and any related constraint, and if necessary, adjust our estimates of the overall transaction price. Sales-based milestones and royalties are not included in the transaction price until the sales occur because the underlying value relates to the license and the license is the predominant feature in the Viatris Agreement. As of June 30, 2023,March 31, 2024, the transaction price allocated to the unfulfilled performance obligations was $54.5$31.0 million.
We recognize revenue and estimate deferred revenue based on the cost of development service incurred over the total estimated cost of development services to be provided for the development period. For revenue recognition purposes, the development period ishas an estimated to be completed in 2026.accounting program end date of 2027. It is possible that this period will change and is assessed at each reporting date. ASC Topic 606, Revenue from Contracts with Customers (ASC 606) requires that an entity include a constraint on the amount of variable consideration included in the transaction price. Variable consideration is
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
considered “constrained” if there is a potential for significant reversal of cumulative revenue recognized. As part of the constraint evaluation, we considered numerous factors, including a potential shift in certain responsibilities between the two parties which would result in changes to the net cost sharing payments and the total project budget, for which outcomes are difficult to predict as of the date of this Report. As a result, no collaboration revenue is recognized from the biosimilar program for the six months ended June 30, 2023. We will continue to evaluate the variable transaction price and related revenue recognition in each reporting period and as the above uncertainties are resolved or other changes in circumstances occur. For the three and six months ended June 30, 2023,March 31, 2024, we recognized no revenue related to development services under the Viatris Agreement.Agreement of $0.2 million. For the three and six months ended June 30, 2022, weMarch 31, 2023, no collaboration revenue is recognized $1.7 million and $5.2 million related tofrom the development services under the Viatris Agreement, respectively.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Fosun License Agreement
Agreement Terms
In December 2018, we entered into the Fosun License Agreement with Fosun, whereby we granted Fosun the exclusive rights to develop and commercialize DaxibotulinumtoxinA for Injection in the Fosun Territory and certain sublicense rights.
As of June 30, 2023,March 31, 2024, Fosun has paid us non-refundable upfront and other payments totaling $38.0$41.0 million before foreign withholding taxes. We are also eligible to receive (i) additional remaining contingent payments of up to $222.5$219.5 million upon the achievement of certain milestones, and (ii) tiered royalty payments in low double digits to high teen percentages on annual net sales. The royalty percentages are subject to reduction in the event that (i) we do not have any valid and unexpired patent claims that cover the product in the Fosun Territory, (ii) biosimilars of the product are sold in the Fosun Territory or (iii) Fosun needs to pay compensation to third parties to either avoid patent infringement or market the product in the Fosun Territory.
Revenue Recognition
We estimated the transaction price for the Fosun License Agreement using the most likely amount method. We evaluated all of the variable payments to be received during the duration of the contract, which included payments from specified milestones, royalties, and estimated supplies to be delivered. We will re-evaluate the transaction price at each reporting period and upon a change in circumstances. As of June 30, 2023,March 31, 2024, the transaction price allocated to unfulfilled performance obligation is $38.0$41.0 million.
For the three and six months ended June 30, 2023, revenue of less than $0.1 million and $0.1 million was recognized from the Fosun License Agreement, respectively. For the three and six months ended June 30, 2022,March 31, 2024, no revenue was recognized from the Fosun License Agreement. For the three months ended March 31, 2023, we recognized revenue of $0.1 million related to the Fosun License Agreement.
Accounts receivablesreceivable and contract liabilities from contracts with our collaboration customers are as follows:
| | June 30, | | December 31, |
| March 31, | | | March 31, | | December 31, |
| (in thousands) | (in thousands) | 2023 | | 2022 | (in thousands) | 2024 | | 2023 |
| Accounts receivables: | | | |
| Accounts receivable, net — Fosun | $ | — | | | $ | 315 | |
| Total accounts receivable, net | $ | — | | | $ | 315 | |
| Accounts receivable: | |
| Accounts receivable — Viatris | |
| Accounts receivable — Viatris | |
| Accounts receivable — Viatris | |
| Accounts receivable — Fosun | |
| Total accounts receivable | |
| | Contract liabilities: | Contract liabilities: | |
| Contract liabilities: | |
| Contract liabilities: | |
| Deferred revenue, current — Viatris | |
| Deferred revenue, current — Viatris | |
| Deferred revenue, current — Viatris | Deferred revenue, current — Viatris | $ | 4,962 | | | $ | 6,162 | |
| | Total contract liabilities, current | Total contract liabilities, current | $ | 4,962 | | | $ | 6,162 | |
| Total contract liabilities, current | |
| Total contract liabilities, current | |
| | Deferred revenue, non-current — Viatris | |
| Deferred revenue, non-current — Viatris | |
| Deferred revenue, non-current — Viatris | Deferred revenue, non-current — Viatris | $ | 44,236 | | | $ | 40,600 | |
| Deferred revenue, non-current — Fosun | Deferred revenue, non-current — Fosun | 37,977 | | | 37,977 | |
| Total contract liabilities, non-current | Total contract liabilities, non-current | $ | 82,213 | | | $ | 78,577 | |
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Changes in our contract liabilities from contracts with our collaboration revenue customers for the sixthree months ended June 30, 2023March 31, 2024 are as follows:
| | | | | |
| (in thousands) |
Balance on December 31, 20222023 | $ | 84,73980,272 | |
| Revenue recognized | (136)(217) | |
| Billings and adjustments, net | 2,572677 | |
Balance on June 30, 2023March 31, 2024 | $ | 87,17580,732 | |
3.
4. Cash Equivalents and Short-Term Investments
The following table summarizesis a summary of our cash equivalents and short-term investments:
| | June 30, 2023 | | December 31, 2022 |
| (in thousands) | Adjusted Cost | | Gains | | Losses | | Fair Value | | Adjusted Cost | | Losses | | Fair Value |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| in thousands | | in thousands | Adjusted Cost | | Unrealized Gain | | Unrealized Loss | | Fair Value | | Adjusted Cost | | Unrealized Gain | | Unrealized Loss | | Fair Value |
| U.S. treasury securities | U.S. treasury securities | $ | 136,829 | | | $ | — | | | $ | (52) | | | $ | 136,777 | | | $ | 109,984 | | | $ | (228) | | | $ | 109,756 | |
| Commercial paper | |
| Money market funds | Money market funds | 98,349 | | | — | | | — | | | 98,349 | | | 85,206 | | | — | | | 85,206 | |
| Commercial paper | 57,843 | | | — | | | (6) | | | 57,837 | | | 80,946 | | | — | | | 80,946 | |
| U.S. government agency obligations | U.S. government agency obligations | 14,760 | | | 5 | | | — | | | 14,765 | | | 4,480 | | | — | | | 4,480 | |
| Corporate bonds | 7,531 | | | — | | | (8) | | | 7,523 | | | 41,186 | | | (146) | | | 41,040 | |
| Total cash equivalents and short-term investments | $ | 315,312 | | | $ | 5 | | | $ | (66) | | | $ | 315,251 | | | $ | 321,802 | | | $ | (374) | | | $ | 321,428 | |
| Total cash equivalents and available-for-sale securities | |
| | Classified as: | Classified as: | |
| Classified as: | |
| Classified as: | |
| Cash equivalents | |
| Cash equivalents | |
| Cash equivalents | Cash equivalents | | $ | 136,763 | | | $ | 89,686 | |
| Short-term investments | Short-term investments | | 178,488 | | | 231,742 | |
| Total cash equivalents and short-term investments | | $ | 315,251 | | | $ | 321,428 | |
| Total cash equivalents and available-for-sale securities | |
As of June 30, 2023March 31, 2024 and December 31, 2022,2023, all of our cash equivalents and short-term investments were available-for-sale securities and had contractual maturities of less than one-year. There were no other-than-temporary impairments on such securities.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
4.5. Intangible Assets, net
The following table sets forth the major categories of intangible assets and the weighted-average remaining useful lives for those assets that are not already fully amortized:amortized or impaired:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, 2023 | | December 31, 2022 |
| (in thousands, except for in years) | | Weighted Average Remaining Useful Lives
(in years) | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Weighted Average Remaining Useful Lives
(in years) | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount |
| Distribution rights | | 4.8 | | $ | 32,334 | | | $ | (21,974) | | | $ | 10,360 | | | 1.4 | | $ | 32,334 | | | $ | (20,882) | | | $ | 11,452 | |
| Acquired developed technology | | 3.8 | | 16,200 | | | (6,075) | | | 10,125 | | | 4.2 | | 35,800 | | | (24,325) | | | 11,475 | |
| Internally developed technology | | 2.0 | | 8,918 | | | (3,798) | | | 5,120 | | | 2.4 | | 8,062 | | | (2,271) | | | 5,791 | |
| Customer relationships | | 1.1 | | 10,300 | | | (7,510) | | | 2,790 | | | 1.6 | | 10,300 | | | (6,223) | | | 4,077 | |
| Other software | | 0.6 | | 879 | | | (813) | | | 66 | | | 1.8 | | 3,166 | | | (1,592) | | | 1,574 | |
| Development in progress | | N/A | | — | | | — | | | — | | | N/A | | 975 | | | — | | | 975 | |
| Total intangible assets | | | | $ | 68,631 | | | $ | (40,170) | | | $ | 28,461 | | | | | $ | 90,637 | | | $ | (55,293) | | | $ | 35,344 | |
N/A - Not applicableAmortization expense of intangible assets for the three and six months ended June 30, 2023 was $2.8 million and $6.8 million, respectively. Amortization expense of intangible assets for the three and six months ended June 30, 2022 was $4.9 million and $9.9 million, respectively.
Based on the amount of intangible assets as of June 30, 2023, the expected amortization expense for each of the next five fiscal years was as follows:
| | | | | |
| Year Ending December 31, | (in thousands) |
| 2023 remaining six months | $ | 5,271 | |
| 2024 | 8,752 | |
| 2025 | 6,147 | |
| 2026 | 4,890 | |
| 2027 | 2,856 | |
| 2028 and thereafter | 545 | |
| Total | $ | 28,461 | |
5. Inventories
Inventories consist of the following: | | | | | | | | | | | |
| June 30, | | December 31, |
| (in thousands) | 2023 | | 2022 |
| Raw materials | $ | 2,208 | | | $ | 505 | |
| Work in process | 9,397 | | | 4,933 | |
| Finished goods | 22,843 | | | 12,887 | |
| Total inventories | $ | 34,448 | | | $ | 18,325 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2024 |
| (in thousands, except for in years) | | Remaining Useful Lives
(in years) | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount |
| Distribution rights | | 4.0 | | $ | 32,334 | | | $ | (23,609) | | | $ | 8,725 | |
| Total intangible assets | | | | $ | 32,334 | | | $ | (23,609) | | | $ | 8,725 | |
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2023 | |
| (in thousands, except for in years) | | Weighted-average Remaining Useful Lives
(in years) | | Gross Carrying Amount | | Accumulated Amortization | | Accumulated Impairment | | Net Carrying Amount | |
| Distribution rights | | 4.3 | | $ | 32,334 | | | $ | (23,064) | | | $ | — | | | $ | 9,270 | | |
Internally developed technology(1) | | 1.5 | | 8,918 | | | (4,408) | | | (3,972) | | | 538 | | (1) |
| Acquired developed technology | | 0.0 | | 16,200 | | | (6,525) | | | (9,675) | | | — | | |
| Customer relationships | | 0.0 | | 10,300 | | | (7,940) | | | (2,360) | | | — | | |
| Total intangible assets | | | | $ | 67,752 | | | $ | (41,937) | | | $ | (16,007) | | | $ | 9,808 | | |
(1)During the three months ended March 31, 2024, we reclassified the $0.5 millionnet carrying amount of internally developed technology to “Non-current assets of discontinued operations” in connection with the discontinued operations presentation.
Amortization expense of the intangible assets in the table above were recorded on the condensed consolidated statements of operations and comprehensive loss based on the function of the associated asset. The detail breakdown of the amortization expenses on the condensed consolidated statements of operations and comprehensive loss were summarized as below:
| | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2024 |
| (in thousands) | Amortization of Intangible Assets (1) | | Classified as Discontinued Operations (2) | | Classified as Continuing Operations |
| Amortization | $ | 545 | | | $ | — | | | $ | 545 | |
| Selling, general and administrative | 528 | | | (528) | | | — | |
| Research and development | 10 | | | (10) | | | — | |
| Total amortization expense | $ | 1,083 | | | $ | (538) | | | $ | 545 | |
| | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2023 |
| (in thousands) | Amortization of Intangible Assets (1) | | Classified as Discontinued Operations (2) | | Classified as Continuing Operations |
| Amortization | $ | 2,004 | | | $ | (1,459) | | | $ | 545 | |
| Selling, general and administrative | 1,737 | | | (644) | | | 1,093 | |
| Research and development | 261 | | | — | | | 261 | |
| Total amortization expense | $ | 4,002 | | | $ | (2,103) | | | $ | 1,899 | |
(1)Amount represents the amortization expense before the impact of reclassification for the discontinued operation presentation in the condensed consolidated statements of operations and comprehensive loss.
(2)Amount represents the reclassification for the current and prior periods for the discontinued operation presentation in the condensed consolidated statements of operations and comprehensive loss.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Based on the amount of intangible assets as of March 31, 2024, the expected amortization expense for each of the next five fiscal years was as follows:
| | | | | |
| Year Ending December 31, | (in thousands) |
| 2024 remaining nine months | $ | 1,637 | |
| 2025 | 2,181 | |
| 2026 | 2,181 | |
| 2027 | 2,181 | |
| 2028 | 545 | |
| 2029 and thereafter | — | |
| Total | $ | 8,725 | |
6. Inventories
Inventories consist of the following: | | | | | | | | | | | |
| March 31, | | December 31, |
| (in thousands) | 2024 | | 2023 |
| Raw materials | $ | 4,049 | | | $ | 3,938 | |
| Work in process | 21,109 | | | 17,418 | |
| Finished goods | 25,122 | | | 24,223 | |
| Total inventories | $ | 50,280 | | | $ | 45,579 | |
7. Accruals and other current liabilities
Accruals and other current liabilities consists of the following:
| | June 30, | | December 31, |
| March 31, | | | March 31, | | December 31, |
| (in thousands) | (in thousands) | 2023 | | 2022 | (in thousands) | 2024 | | 2023 |
| Accruals related to: | Accruals related to: | | | |
| Compensation | $ | 17,771 | | | $ | 28,014 | |
Compensation(1) | |
Compensation(1) | |
Compensation(1) | |
| Inventories | |
| Research and development | |
| Selling, general and administrative | Selling, general and administrative | 7,143 | | | 9,681 | |
| Research and development | 5,374 | | | 9,012 | |
| Royalty | |
| Interest expense | Interest expense | 1,887 | | | 1,912 | |
| Clinical trials | 1,173 | | | 1,863 | |
| Inventories | 872 | | | 2,312 | |
| Other current liabilities | 5,315 | | | 6,563 | |
Other current liabilities(1) | |
| Total accruals and other current liabilities | Total accruals and other current liabilities | $ | 39,535 | | | $ | 59,357 | |
(1)Amounts related to current liabilities of discontinued operations have been reclassified to conform to current period presentation.
7.8. Leases
Operating Leases
Our operating leases primarily consist of non-cancellable facilities leases for research, manufacturing, and administrative functions. Our non-cancellable facilities operating leases have original lease periods expiring between 2027 and 2034, and include one or more options to renew for seven years to fourteen years. The monthly payments for our
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
operating leases escalate over the remaining lease term. Our lease contracts do not contain termination options, residual value guarantees or restrictive covenants.
FinanceABPS Fill-And-Finish Line Lease
Our finance lease represents a dedicated fill-and-finish line for the manufacturing of DAXXIFY®. In March 2017, we entered into the ABPS Services Agreement. The ABPS Services Agreement contains a lease, which commenced in January 2022, related to a dedicated fill-and-finish line for the manufacturing of DAXXIFY® because it has an identified asset that is physically distinct for which we have the right of control as defined under ASC 842. The right of control is conveyed because the embedded lease provides us with both (i) the right to obtain substantially all of the economic benefit from the fill-and-finish line resulting from the exclusivity of the dedicated manufacturing capacity and (ii) the right to direct the use of the fill-and-finish line through our purchase orders to ABPS. Each party has the right to terminate the ABPS Services Agreement without cause, with an 18-month18 month written notice to the other party. The lease is classified as a finance lease in the condensed consolidated balance sheets.sheets as of December 31, 2023 before the impact of a statement of work entered into in April 2024 as described below.
UnderIn February 2024, we entered into the second amendment to the ABPS Services Agreement, until May 2022, we were subject to minimum purchase obligations of up to $30.0 million for eachwhich extended the term of the years endingABPS Service Agreement through December 31, 2022, 20232027, and 2024.modified our remedies with respect to conforming products and delays. In May 2022,April 2024, we amendedentered into a statement of work under the ABPS ServicesService Agreement, pursuant to which theand our minimum purchase obligations of $30.0obligation was established to be $25.1 million per year were eliminated, and instead the minimum purchase obligations would be negotiated prior to the beginning of each year over the term of the agreement. As a result of the amended statement of work, the finance lease was modified. The primary change was that the modification reflects payments in 2023 and 2024 as variable lease payments, contingent on negotiation at the beginning of each period and excludes such payments in the present value calculation in arriving at the remaining finance lease liabilities with a corresponding adjustment to the related right-of-use asset, among other considerations and changes.
In January 2023, we entered into a second amendment to the above mentioned statement of work under the ABPS Services Agreement. The second amendment established a minimum purchase obligation for the year ending December 31, 20232024 pursuant to this statement of $23.9 million, which represents ABPS’ practical manufacturing capability based on experience.work. The minimum purchase obligation foris subject to reduction based on ABPS’ actual manufacturing output. Due to the year ending Decembertiming of the statement of work entered in April 2024, this lease was temporarily classified as an operating lease on March 31, 20232024.
On March 31, 2024, the ABPS fill-and-finish line lease was determined to be fixed lease payments and such payments
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
will increase the present value calculation in arriving at the remainingreclassified from a finance lease liabilities with a corresponding adjustment to an operating lease on our condensed consolidated balance sheets. However, the relatedlease activities during the three months ended March 31, 2024 were recorded based on finance lease right-of-use asset.
Theaccounting. Our operating and finance lease costs are summarized as follows:
| | | | Three Months Ended June 30, | | Six Months Ended June 30, | | Three Months Ended March 31, |
| (in thousands) | (in thousands) | 2023 | | 2022 | | 2023 | | 2022 | (in thousands) | 2024 | | 2023 |
| Finance lease: | Finance lease: | | | | | | | |
Amortization of finance lease right-of-use asset (1) | |
Amortization of finance lease right-of-use asset (1) | |
Amortization of finance lease right-of-use asset (1) | Amortization of finance lease right-of-use asset (1) | $ | 1,350 | | | $ | 1,158 | | | $ | 3,668 | | | $ | 1,158 | |
| Interest on finance lease liability | Interest on finance lease liability | 442 | | | 751 | | | 1,008 | | | 2,259 | |
Variable lease cost (2) | Variable lease cost (2) | — | | | 323 | | | 374 | | | 1,713 | |
| Total finance lease costs | Total finance lease costs | 1,792 | | | 2,232 | | | 5,050 | | | 5,130 | |
| Operating leases: | Operating leases: | |
| Operating lease cost | Operating lease cost | 4,312 | | | 2,223 | | | 6,519 | | | 4,446 | |
| Operating lease cost | |
| Operating lease cost | |
Variable lease cost (3) | Variable lease cost (3) | 548 | | | 431 | | | 1,055 | | | 865 | |
| Total operating lease costs | Total operating lease costs | 4,860 | | | 2,654 | | | 7,574 | | | 5,311 | |
| Total lease costs | $ | 6,652 | | | $ | 4,886 | | | $ | 12,624 | | | $ | 10,441 | |
| Total lease cost | |
(1)Starting in the three months ended June 30, 2023, amortizationAmortization of the finance lease right-of-use asset isstarted to be capitalized into inventories on the condensed consolidated balance sheets resulting fromin the second quarter of 2023, as a result of the FDA approval of the PAS of the ABPS manufacturing facility.
(2)Variable finance lease cost includes validation, qualification, materials, and other related services which are not included in the lease liabilities and are expensed as incurred.
(3)Variable operating lease cost includes management fees, common area maintenance, property taxes, insurance and parking fees, which are not included in the lease liabilities and are expensed as incurred.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
As of June 30, 2023,March 31, 2024, we have $0.4 million of accounts payable related to the fill-and-finish line lease under the ABPS Service Agreement. Additionally, we have maturities of our lease liabilities are as follows:
| | (in thousands) | (in thousands) | Finance Lease | | Operating Leases | | Total | (in thousands) | ABPS Fill-and-Finish Line Lease | | Other Operating Leases | | All Operating Leases |
| Year Ending December 31, | Year Ending December 31, | | | | | |
| 2023 remaining six months | $ | 12,855 | | | $ | 3,952 | | | $ | 16,807 | |
| 2024 | 3,102 | | | 8,723 | | | 11,825 | |
| 2024 remaining nine months | |
| 2024 remaining nine months | |
| 2024 remaining nine months | |
| 2025 | 2025 | — | | | 8,981 | | | 8,981 | |
| 2026 | 2026 | — | | | 9,242 | | | 9,242 | |
| 2027 | 2027 | — | | | 2,535 | | | 2,535 | |
| 2028 and thereafter | — | | | 14,612 | | | 14,612 | |
| 2028 | |
| 2029 and thereafter | |
| Total lease payments | Total lease payments | 15,957 | | | 48,045 | | | 64,002 | |
| Less imputed interest | Less imputed interest | (452) | | | (11,510) | | | (11,962) | |
| Present value of lease payments | Present value of lease payments | $ | 15,505 | | | $ | 36,535 | | | $ | 52,040 | |
Our lease contracts do not provide readily determinable implicit rates, as such, we used the estimated incremental borrowing rate based on the information available at the adoption, commencement, or remeasurement date. As of June 30, 2023,March 31, 2024, weighted-average remaining lease terms and discount rates are as follows:
| | Finance Leases | | Operating Leases |
| ABPS Fill-and-Finish Line Lease | | | ABPS Fill-and-Finish Line Lease | | Other Operating Leases | | All Operating Leases |
| Weighted-average remaining lease term (years) | Weighted-average remaining lease term (years) | 2.8 | | 7.2 | Weighted-average remaining lease term (years) | 3.8 | | 8.0 | | 7.9 |
| Weighted-average discount rate | Weighted-average discount rate | 10.7 | % | | 9.8 | % | Weighted-average discount rate | 10.0 | % | | 10.0 | % | | 10.0 | % |
REVANCE THERAPEUTICS, INC.
NotesOn March 31, 2024, the ABPS fill-and-finish line lease was reclassified from a finance lease to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
an operating lease on our condensed consolidated balance sheets. However, the lease activities during the three months ended March 31, 2024 were recorded based on finance lease accounting. Supplemental cash flow information related to the leases was as follows:
| | Six Months Ended June 30, |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
| (in thousands) | (in thousands) | 2023 | | 2022 | (in thousands) | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities | Cash paid for amounts included in the measurement of lease liabilities | | | |
| Operating cash flows from operating leases | |
| Operating cash flows from operating leases | |
| Operating cash flows from operating leases | Operating cash flows from operating leases | $ | 4,188 | | | $ | 4,192 | |
| Operating cash flows from finance lease | Operating cash flows from finance lease | $ | 1,008 | | | $ | 627 | |
| Financing cash flows from finance lease | Financing cash flows from finance lease | $ | 8,899 | | | $ | 1,760 | |
| Right-of-use assets obtained in exchange for lease liabilities | Right-of-use assets obtained in exchange for lease liabilities | |
| Finance lease | Finance lease | $ | 23,735 | | | $ | 18,556 | |
| Finance lease | |
| Finance lease | |
LeasesLease Not Yet Commenced
PCI Supply Agreement
In April 2021, we entered into the PCI Supply Agreement pursuant to which PCI would serve as a non-exclusive manufacturer and supplier of DAXXIFY®. The initial term of the PCI Supply Agreement is dependent upon the date of regulatory submission for the manufacturing of DAXXIFY® and may be terminated by either party in accordance with the terms of the PCI Supply Agreement. The term of the PCI Supply Agreement may also be extended for one additional three-year term upon mutual agreement of the parties.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
The PCI Supply Agreement contains a lease related to a dedicated fill-and-finish line and closely related assets for the manufacturing of DAXXIFY® because it has identified assets that are physically distinct for which we will have the right of control as defined under ASC 842. The right of control is conveyed because the embedded lease will provide us with both (i) the right to obtain substantially all of the economic benefit from the fill-and-finish line resulting from the exclusivity implied from the dedicated manufacturing capacity and (ii) the right to direct the use of the fill-and-finish line.
The embedded lease had not yet commenced as of June 30, 2023.March 31, 2024. The accounting commencement and recognition of the right-of-use lease assets and lease liabilities related to the embedded lease will take place when we have substantively obtained the right of control. The embedded lease is preliminarily classified as a finance lease.
Pursuant to the PCI Supply Agreement, we are responsible for certain costs associated with the design, equipment procurement and validation, and facilities-related costs, monthly payments and minimum purchase obligations throughout the initial term of the PCI Supply Agreement. As of June 30, 2023,March 31, 2024, we have made prepayments of $27.5$35.8 million to PCI which is recorded within “Finance lease prepaid expense” in the condensed consolidated balance sheets. Based on our best estimate as of June 30, 2023,March 31, 2024, our remaining minimum commitment under the PCI Supply Agreement will be $12.7 million for 2023, $15.9is $13.8 million for 2024, $18.3$14.4 million for 2025, $25.3$18.8 million for 2026, $29.5$25.2 million for 2027, $29.1 million for 2028, and $134.5 million for 20282029 and thereafter in aggregate.
Nashville Lease Expansion Premises
In November 2020, we entered into the Nashville Lease, a non-cancelable operating lease for an office space9. Debt
The following table provides information regarding our debt:
| | | | | | | | | | | |
| March 31, | | December 31, |
| (in thousands) | 2024 | | 2023 |
| 2027 Notes, non-current | $ | 287,500 | | | $ | 287,500 | |
| Less: Unamortized debt issuance costs | (3,948) | | | (4,279) | |
| Carrying amount of the 2027 Notes | 283,552 | | | 283,221 | |
| | | |
| Notes Payable, current | 5,000 | | | 2,500 | |
| Notes Payable, non-current | 145,000 | | | 147,500 | |
| Less: Unamortized debt discount | (2,425) | | | (2,700) | |
| Less: Unamortized debt issuance costs | (1,289) | | | (1,426) | |
| Carrying amount of Notes Payable | 146,286 | | | 145,874 | |
| Total debt | $ | 429,838 | | | $ | 429,095 | |
Interest expense relating to our debt in Nashville, Tennessee. The lease commenced and was recognized on the condensed consolidated balance sheets in June 2021. In July 2021, we entered into the second amendment to the Nashville Lease, which provided for the expansionstatements of the initial premises to include the Expansion Premises, an additional 30,591 square feet with an expected term to 2034. The lease accounting commencement date of the Expansion Premises has not occurredoperations and is expected to take place when the office space is made available to us after the completion of certain improvement work, which is currently expected in late 2023 at the earliest. The monthly base rent payments for the lease escalate over the term. The total undiscounted basic rent payments currently determinable for the Expansion Premisescomprehensive loss are $16 million with an expected term to 2034.summarized as follows:
| | | | | | | | | | | |
| Three Months Ended March 31, |
| (in thousands) | 2024 | | 2023 |
| Contractual interest expense | $ | 4,469 | | | $ | 3,383 | |
| Amortization of debt issuance costs | 483 | | | 432 | |
| Amortization of debt discount | 274 | | | 85 | |
| Total interest expense | $ | 5,226 | | | $ | 3,900 | |
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
In January 2023, we entered into the third amendment to the Nashville Lease, which provides for the expansion of the current premises to include the Second Expansion Premises, an additional 17,248 square feet with an expected term to 2032. The monthly base rent payments for the lease escalate over the term, and the total undiscounted basic rent payments determinable for the Second Expansion Premises are $7 million. The lease accounting commencement date of the Second Expansion Premises has not occurred and is expected to take place when the office space is made available to us after the completion of certain improvement work, which is currently expected in late 2023.
8. Debt
The following table provides information regarding our debt:
| | | | | | | | | | | |
| June 30, | | December 31, |
| (in thousands) | 2023 | | 2022 |
| 2027 Notes | $ | 287,500 | | | $ | 287,500 | |
| Less: Unamortized debt issuance costs | (4,937) | | | (5,587) | |
| Carrying amount of the 2027 Notes | 282,563 | | | 281,913 | |
| | | |
| Notes Payable | 100,000 | | | 100,000 | |
| Less: Unamortized debt discount | (1,175) | | | (1,347) | |
| Less: Unamortized debt issuance costs | (1,040) | | | (1,192) | |
| Carrying amount of Notes Payable | 97,785 | | | 97,461 | |
| Debt, non-current | $ | 380,348 | | | $ | 379,374 | |
Interest expense relating to our debt in the condensed consolidated statements of operations and comprehensive loss are summarized as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| (in thousands) | 2023 | | 2022 | | 2023 | | 2022 |
| Contractual interest expense | $ | 3,407 | | | $ | 3,383 | | | $ | 6,790 | | | $ | 4,971 | |
| Amortization of debt issuance costs | 431 | | | 417 | | | 863 | | | 749 | |
| Amortization of debt discount | 87 | | | 74 | | | 172 | | | 85 | |
| Total interest expense | $ | 3,925 | | | $ | 3,874 | | | $ | 7,825 | | | $ | 5,805 | |
Convertible Senior Notes
In February 2020, we issued the 2027 Notes, in the aggregate principal amount of $287.5 million, pursuant to the Indenture. The 2027 Notes are senior unsecured obligations and bear interest at a rate of 1.75% per year, payable semiannually in arrears on February 15 and August 15 of each year, began on August 15, 2020. The 2027 Notes will mature on February 15, 2027, unless earlier converted, redeemed or repurchased. In connection with issuing the 2027 Notes, we received $278.3 million in net proceeds, after deducting the initial purchasers’ discount, commissions, and other issuance costs.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
The 2027 Notes may be converted at any time by the holders prior to the close of business on the business day immediately preceding November 15, 2026 only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2020 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the 2027 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (iii) if we call any or all of the 2027 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events. On or after November 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date,Maturity Date, holders may convert all or any portion of their 2027 Notes at any time, regardless of the foregoing circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
The conversion rate will initially be 30.8804 shares of our common stock per $1,000 principal amount of the 2027 Notes (equivalent to an initial conversion price of approximately $32.38 per share of our common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity dateMaturity Date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2027 Notes in connection with such a corporate event or notice of redemption, as the case may be.
Contractually, we maycould not redeem the 2027 Notes prior to February 20, 2024. We may redeem for cash all or any portion of the 2027 Notes, at our option, on or after February 20, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the 2027 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. The threshold to redeem has not been met as of March 31, 2024. No sinking fund is provided for the 2027 Notes.
If we undergo a fundamental change (as defined in the Indenture), holders may require us to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2027 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
Capped Call Transactions
Concurrently with the 2027 Notes, we entered into capped call transactions with the option counterparties and used $28.9 million of the net proceeds from the 2027 Notes to pay the cost of the capped call transactions. The capped call transactions are expected generally to reduce the potential dilutive effect upon conversion of the 2027 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a price cap of $48.88 of our common stock per share, which represents a premium of 100% over the last reported sale price of our common stock on February 10, 2020. The capped calls have an initial strike price of $32.38 per share, subject to certain adjustments, which corresponds to the conversion option strike price in the 2027
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Notes. The capped call transactions cover, subject to anti-dilution adjustments, approximately 8.9 million shares of our common stock.
The capped call transactions are separate transactions that we entered into with the option counterparties and are not part of the terms of the 2027 Notes. As the capped call transactions meet certain accounting criteria, the premium paid of $28.9 million was recorded as a reduction in additional paid-in capital in the condensed consolidated balance sheets, and will not be remeasured to fair value as long as the accounting criteria continue to be met. As of June 30, 2023March 31, 2024 and December 31, 2022,2023, we had not purchased any shares under the capped call transactions.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Note Purchase Agreement
In March 2022, we entered into the Note Purchase Agreement and issued the First Tranche in an aggregate principal amount for all such Notes of $100 million. OnIn August 8, 2023, the Company, HintMD and Athyriumwe entered into the First Amendment. PursuantAmendment to the First Amendment,reduce the Second Tranche commitment was reduced from $100 million to $50 million, and we subsequently issued $50 million to the Purchasers. Additionally, the First Amendment increased the uncommitted Third Tranche was increased from $100 million to $150 million. On or before August 31, 2023, the Company expects to issue to the purchasers under the Note Purchase Agreement notes in an aggregate principal amount of $50 million, provided certain conditions are met. The uncommitted Third Tranche iswas available until March 31, 2024, subject to the satisfaction of certain conditions set forth in the Note Purchase Agreement, including the achievement of greater than or equal to $50 million in trailing twelve months revenue for DAXXIFY® preceding the date of the draw request for the Third Tranche, and approval by Athyrium.
Our obligations under the Note Purchase Agreement are secured by substantially all of our assets and the assets of our wholly owned domestic subsidiaries, including their respective intellectual property.
The notes issued pursuant to the First Tranche and to be issued pursuant to the Second Tranche will bear interest at an annual fixed interest rate equal to 8.50%. The First Amendment modified the variable interest rate adjustment for the Third Tranche from Adjusted Three-Month LIBOR to Adjusted Three-Month Term SOFR. If the Third Tranche of Notes Payable becomesbecame committed, the Notes Payable will then bearwould have born interest at an annual rate equal to the sum of (a) 7.0% and (b) Adjusted Three-Month Term SOFR for such interest period (subject to a floor of 1.50% and a cap of 2.50%). We are required to make quarterly interest payments on each Notes Payable commencing on the last business day of the calendar month following the funding date thereof, and continuing until the Maturity Date. Pursuant to the First Amendment, the Company is required to repay Athyrium the outstanding principal amount of the Second Tranche notes in installments on the last business day of each March, June, September and December (commencing in September 2024), in each case, based on the following principal amortization payment schedule: 2.5% in September and December 2024; 5.0% in March and June 2025; 7.5% in September and December 2025; and 10.0% in March and June 2026; followed by repayment of the Second Tranche in full on September 18, 2026. The Maturity Date may be extended to March 18, 2028 if, as of September 18, 2026, less than $90 million principal amount of our existing 2027 Notes remain outstanding and with the consent of the Purchasers. Initially, all principal for each tranche is due and payable on the Maturity Date. If any Third Tranche notes arewere issued, upon the occurrence of an Amortization Trigger (as defined in the Note Purchase Agreement), we arewould have been required to repay the principal of the Third Tranche in equal monthly installments beginning on the last day of the month in which the Amortization Trigger occurred and continuing through the Maturity Date. At our option, we may prepay the outstanding principal balance of all or any portion of the principal amount of the Notes Payable, subject to a prepayment fee equal to (i) a make-whole amount if the prepayment occurs on or prior to the first anniversary of the NPA Effective Date and (ii) 2.0% of the amount prepaid if the prepayment occurs after the first anniversary of the NPA Effective Date but on or prior to the second anniversary of the NPA Effective Date. Upon prepayment or repayment of all or any portion of the principal amount of the Notes Payable (whether on the Maturity Date or otherwise), we are also required to pay an exit fee to the Purchasers.
The Note Purchase Agreement includes affirmative and negative covenants applicable to us, our current subsidiaries and any subsidiaries we create in the future. The affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage and satisfy certain requirements regarding deposit accounts. We must also (i) maintain at least $30.0 million of unrestricted cash and cash equivalents in accounts subject to a control agreement in favor of Athyrium at all times (the Minimum Cash Covenant) and (ii) upon the occurrence of certain specified events set forth in the Note Purchase Agreement, achieve at least $70.0 million of Consolidated Teoxane Distribution Net Product Sales on a trailing twelve-months basis. The negative covenants include, among others, restrictions on our transferring collateral, incurring additional indebtedness, engaging in
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and undergoing a change in control, in each case subject to certain exceptions.
If we do not comply with the affirmative and negative covenants, such non-compliance may be an event of default under the Note Purchase Agreement. The Note Purchase Agreement also includes events of default, the occurrence and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 2.0% and would provide Athyrium, as administrative agent, with the right to exercise remedies against us and the collateral, including foreclosure against our property securing the obligations under the Note Purchase Agreement, including our cash. These events of default
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
include, among other things, our failure to pay principal or interest due under the Note Purchase Agreement, a breach of certain covenants under the Note Purchase Agreement, our insolvency, the occurrence of a circumstance which could have a material adverse effect and the occurrence of any default under certain other indebtedness.
9.10. Stockholders’ EquityDeficit and Stock-Based Compensation
Equity Compensation Plans
2014 EIP
On January 1, 2023,2024, the number of shares of common stock reserved for issuance under the 2014 EIP increased by 3.33.5 million shares. For the sixthree months ended June 30, 2023, 2.4March 31, 2024, 3.0 million shares of stock awards and 0.2 million stock options were granted under the 2014 EIP. As of June 30, 2023, 4.0March 31, 2024, 5.6 million shares were available for issuance under the 2014 EIP.
2014 IN
For the sixthree months ended June 30, 2023, noMarch 31, 2024, 0.2 million shares of stock options or awards were granted under the 2014 IN. As of June 30, 2023, 0.8March 31, 2024, 0.9 million shares were available for issuance under the 2014 IN.
HintMD Plan
For the sixthree months ended June 30, 2023,March 31, 2024, no stock options or awards were granted under the HintMD Plan. As of June 30, 2023,March 31, 2024, 0.1 million shares were available for issuance under the HintMD Plan.
2014 ESPP
On January 1, 2023,2024, the number of shares of common stock reserved for issuance under the 2014 ESPP increased by 0.3 million shares. As of June 30, 2023, 1.8March 31, 2024, 2.0 million shares were available for issuance under the 2014 ESPP.
Net Loss per Share
Our basic net loss per share from continuing operations is calculated by dividing the net loss from continuing operations by the weighted average number of shares of common stock outstanding for the period. Our basic net loss per share from discontinued operations is calculated by dividing the net loss from discontinued operations by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share isfrom both continuing and discontinued operations are calculated by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, shares of common stock underlying the 2027 Notes at the initial conversion price, outstanding stock options, and unvested stock awards, and shares of common stock expected to be purchased under the 2014 ESPP, are considered common stock equivalents, which were excluded from the computation of diluted net loss per share because including them would have been antidilutive.
Common stock equivalents that were excluded from the computation of diluted net loss per share are presented below:
| | | | | | | | | | | |
| | June 30, |
| | 2023 | | 2022 |
| Convertible senior notes | 8,878,938 | | 8,878,938 |
| Outstanding stock options | 4,391,679 | | 5,063,074 |
| Unvested RSUs and PSUs | 3,281,382 | | 2,492,797 | |
| Unvested RSAs and PSAs | 1,577,981 | | 2,656,703 |
ATM Offering Programs
In November 2020, we entered into the 2020 ATM Agreement with Cowen. Under the 2020 ATM Agreement, we could offer and sell, from time to time, through Cowen, shares of our common stock having an aggregate offering price of up to $125.0 million. We were not obligated to sell any shares under the 2020 ATM Agreement. Subject to the terms and
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
conditionsCommon stock equivalents that were excluded from the computation of the 2020 ATM Agreement, Cowen was requireddiluted net loss per share for both continuing and discontinued operations are presented below:
| | | | | | | | | | | |
| | March 31, |
| | 2024 | | 2023 |
| Convertible senior notes | 8,878,938 | | 8,878,938 |
| Unvested RSUs and PSUs | 5,496,036 | | 3,598,879 | |
| Outstanding stock options | 3,669,894 | | 4,541,131 |
| Unvested RSAs and PSAs | 642,419 | | 1,728,551 |
| Shares of common stock expected to be purchased on June 30 under the 2014 ESPP | 220,451 | | 165,079 |
Follow-On Offering
In March 2024, we completed a follow-on offering, pursuant to use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of The Nasdaq Global Market, to sell shares from time to time based upon our instructions, including any price, time or size limits specified by us. We paid Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimbursed legal fees and disbursements and provided Cowen with customary indemnification and contribution rights. From January 1, 2022 through May 10, 2022,which we sold 1.7issued 16.0 million shares of common stock under the 2020 ATM Agreement at a weighted average price to the public of $18.71$6.25 per share resulting in(except with respect to 30,000 shares sold and issued to Mark Foley, our president, chief executive officer, and director, at $6.98 per share), for net proceeds of $31.6$97.1 million, after sales agent commissionsunderwriting discounts and estimated offering costs. The 2020
ATM Agreement was terminated on May 10, 2022.Offering Programs
On May 10, 2022, we entered into the 2022 ATM Agreement with Cowen. Under the 2022 ATM Agreement, we may sell up to $150.0 million of our common stock. We are not obligated to sell any shares under the 2022 ATM Agreement. Subject to the terms and conditions of the 2022 ATM Agreement, Cowen will use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of The Nasdaq Global Market, to sell shares from time to time based upon our instructions, including any price, time or size limits specified by us. We pay Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Cowen with customary indemnification and contribution rights.
For the three months ended June 30,In 2023, we sold 3.2 million shares of common stock under the 2022 ATM Agreement at a weighted average price of $31.90 per share, resulting in net proceeds of $100.0 million after sales agent commissions and offering costs. No shares of common stock were sold under the 2022 ATM Agreement forduring the three months ended March 31, 2023.2024 from the 2022 ATM Agreement.
Stock-BasedStock-based Compensation Expense
The following table summarizes our stock-based compensation expense by line item in our condensed consolidated statements of operations and comprehensive loss:
| | | | | | | | | | | | | | | | | | | | | | | |
| (in thousands) | Three Months Ended June 30, | | Six Months Ended June 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
| Selling, general and administrative | $ | 12,178 | | | $ | 6,528 | | | $ | 22,443 | | | $ | 14,692 | |
| Research and development | 3,421 | | | 2,735 | | | 6,238 | | | 8,934 | |
| Cost of product revenue (exclusive of depreciation and amortization) | 948 | | | — | | | 948 | | | — | |
| Total stock-based compensation expense | $ | 16,547 | | | $ | 9,263 | | | $ | 29,629 | | | $ | 23,626 | |
Capitalized Stock-based Compensation Expense
For the three and six months ended June 30, 2023, stock-based compensation expense of $0.9 million and $1.9 million, respectively, was capitalized in inventories on the condensed consolidated balance sheets, which is subsequently expensed to cost of product revenue (exclusive of depreciation and amortization) on the condensed consolidated statements of operations and comprehensive loss as shown in the table above. | | | | | | | | | | | | | | | | | |
| (in thousands) | Three Months Ended March 31, 2024 |
Stock-based Compensation before Discontinued Operation Adjustments(1) | | Classified as Discontinued Operations (2) | | Classified as Continuing Operations |
| Selling, general and administrative | $ | 7,624 | | | $ | (240) | | | $ | 7,384 | |
| Research and development | 1,366 | | | 13 | | | 1,379 | |
| Total stock-based compensation expense (exclusive of capitalized stock-based compensation expense) | 8,990 | | | (227) | | | 8,763 | |
| Capitalized stock-based compensation expense | 388 | | | — | | | 388 | |
| Total stock-based compensation expense | $ | 9,378 | | | $ | (227) | | | $ | 9,151 | |
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
10. | | | | | | | | | | | | | | | | | |
| (in thousands) | Three Months Ended March 31, 2023 |
Stock-based Compensation before Discontinued Operation Adjustments(1) | | Classified as Discontinued Operations (2) | | Classified as Continuing Operations |
| Selling, general and administrative | $ | 10,265 | | | $ | (710) | | | $ | 9,555 | |
| Research and development | 2,817 | | | (1,420) | | | 1,397 | |
| Total stock-based compensation expense (exclusive of capitalized stock-based compensation expense) | 13,082 | | | (2,130) | | | 10,952 | |
| Capitalized stock-based compensation expense | 1,407 | | | — | | | 1,407 | |
| Total stock-based compensation expense | $ | 14,489 | | | $ | (2,130) | | | $ | 12,359 | |
(1)Amount represents the stock-based compensation expense before the impact of reclassification for the discontinued operation presentation in the condensed consolidated statements of operations and comprehensive loss.
(2)Amount represents the reclassification for the current and prior periods for the discontinued operation presentation in the condensed consolidated statements of operations and comprehensive loss.
11. Fair Value Measurements
The following table summarizes, for assets and liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy.hierarchy:
| | June 30, 2023 |
| March 31, 2024 | | | March 31, 2024 |
| (in thousands) | (in thousands) | Fair Value | | Level 1 | | Level 2 | | Level 3 | (in thousands) | Fair Value | | Level 1 | | Level 2 | | Level 3 |
| Assets | Assets | | | | | | | |
| U.S. treasury securities | |
| U.S. treasury securities | |
| U.S. treasury securities | U.S. treasury securities | $ | 136,777 | | | $ | 136,777 | | | $ | — | | | $ | — | |
| Money market funds | Money market funds | 98,349 | | | 98,349 | | | — | | | — | |
| U.S. government agency obligations | U.S. government agency obligations | 14,765 | | | 14,765 | | | — | | | — | |
| Commercial paper | Commercial paper | 57,837 | | | — | | | 57,837 | | | — | |
| Corporate bonds | 7,523 | | | — | | | 7,523 | | | — | |
| Total assets measured at fair value | Total assets measured at fair value | $ | 315,251 | | | $ | 249,891 | | | $ | 65,360 | | | $ | — | |
| | December 31, 2022 |
| December 31, 2023 | | | December 31, 2023 |
| (in thousands) | (in thousands) | Fair Value | | Level 1 | | Level 2 | | Level 3 | (in thousands) | Fair Value | | Level 1 | | Level 2 | | Level 3 |
| Assets | Assets | | | | | | | |
| U.S. treasury securities | |
| U.S. treasury securities | |
| U.S. treasury securities | U.S. treasury securities | $ | 109,756 | | | $ | 109,756 | | | $ | — | | | $ | — | |
| Money market funds | Money market funds | 85,206 | | | 85,206 | | | — | | | — | |
| U.S. government agency obligations | U.S. government agency obligations | 4,480 | | | 4,480 | | | — | | | — | |
| Commercial paper | Commercial paper | 80,946 | | | — | | | 80,946 | | | — | |
| Corporate bonds | 41,040 | | | — | | | 41,040 | | | — | |
| Total assets measured at fair value | Total assets measured at fair value | $ | 321,428 | | | $ | 199,442 | | | $ | 121,986 | | | $ | — | |
For Level 1 investments, we use quoted prices in active markets for identical assets to determine the fair value. For Level 2 investments, we use quoted prices for similar assets sourced from certain third-party pricing services. The third-party pricing services generally utilize industry standard valuation models for which all significant inputs are observable, either directly or indirectly, to estimate the price or fair value of the securities. The primary input generally includes reported trades of or quotes on the same or similar securities. We do not make additional judgments or assumptions made to the pricing data sourced from the third-party pricing services.
The fair value of the 2027 Notes and the Notes Payable (Note 89) was determined on the basis of market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy. We present the fair value of the 2027 Notes and the Notes payable for disclosure purposes only. As of June 30, 2023, and December 31, 2022, the fair value of the 2027 Notes was $302.9 million and $288.2 million, respectively. As of June 30, 2023 and December 31, 2022, the fair value of the Notes Payable was approximately the same as its unamortized carrying value.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
11.Notes and the Notes payable for disclosure purposes only. As of March 31, 2024, and December 31, 2023, the fair value of the 2027 Notes was $211.5 million and $219.2 million, respectively. As of March 31, 2024 the fair value of the Notes Payable was approximately the same as its unamortized carrying value.
12. Commitments and Contingencies
Teoxane Agreement
In January 2020, we entered into the Teoxane Agreement, as amended, pursuant to which Teoxane granted us the exclusive right to import, market, promote, sell and distribute Teoxane’s line of Resilient Hyaluronic Acid® dermal fillers, which include: (i) RHA® Collection of dermal fillers, and (ii) the RHA® Pipeline Products in the U.S. and U.S. territories and possessions, in exchange for 2,500,000 shares of our common stock and certain other commitments by us. The Teoxane Agreement is effective for a term of ten years from product launch in September 2020 and may be extended for a two-year period upon the mutual agreement of the parties. We are required to meet certain minimum purchase obligations during each year of the term. Our minimum purchase obligation for the yearsyear ending December 31, 2023 and December 31, 2024 will be $40 million andis $52 million, respectively. Minimummillion. Our minimum purchase obligations after December 31, 2024 maywill be determined at a later date.based on projected market growth rate. We are also required to meet certain minimum expenditure requirements in connection with commercialization efforts. Our minimum expenditures related to the commercialization and promotion of RHA® Collection of dermal fillers and RHA® Pipeline Products, which is $36 million for the years endedyear ending December 31, 2023 and 2024 will be $34 million and $36 million, respectively.2024. Minimum expenditures related to the commercialization and promotion of the RHA® Collection of dermal fillers and RHA® Pipeline Products after December 31, 2024 maywill be determined at a later date.
Either party may terminate the Teoxane Agreement in the event of the insolvency of, or a material breach by, the other party, including certain specified breaches that include the right for Teoxane to terminate the Teoxane Agreement for our failure to meet the minimum purchase requirements or commercialization expenditure during specified periods, or for our breach of the exclusivity obligations under the Teoxane Agreement.
Other Contingencies
As of June 30, 2023,March 31, 2024, we are obligated to pay BTRX up to a remaining $15.5 million upon the satisfaction of certain milestones relating to our product revenue, intellectual property, and clinical and regulatory events.
Indemnification
We have standard indemnification agreements in the ordinary course of business. Under these indemnification agreements, we indemnify, hold harmless, and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to our technology. The term of these indemnification agreements is generally perpetual after the execution of the agreements. The maximum potential amount of future payments we are obligated to pay under other indemnification agreements is not determinable because it involves claims for indemnification that may be made against us in the future but have not been made. We have not yet incurred material costs to defend lawsuits or settle claims related to indemnification agreements.
We have indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual.
For the sixthree months ended June 30,March 31, 2024 and 2023, and 2022, no material amounts associated with the indemnification agreements have been recorded.
Litigation
In October 2021, Allergan filed a complaint against us and ABPS, one of our manufacturing sources of DAXXIFY®, in the U.S. District Court for the District of Delaware, alleging infringement of the following patents assigned and/or licensed to Allergan: U.S. Patent Nos. 11,033,625; 7,354,740; 8,409,828; 11,124,786; and 7,332,567. Allergan claims that our
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
formulation for DAXXIFY® and ABPS’s manufacturing process used to produce DAXXIFY® infringes its patents. Allergan also asserted a patent with claims related to a substrate for use in a botulinum toxin detection assay. On November 3, 2021, we filed a motion to dismiss. On November 24, 2021, Allergan filed an amended complaint against us and ABPS, alleging
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
infringement of an additional patent assigned and/or licensed to Allergan: U.S. Patent No. 11,147,878. On December 17, 2021, we filed a second motion to dismiss, and on January 14, 2022, Allergan filed an opposition to that motion. We filed a reply to Allergan’s opposition on January 21, 2022, and on August 19, 2022, the court denied our second motion to dismiss. On September 2, 2022, we filed an answer and counterclaims to Allergan’sAllergan's amended complaint. On December 30, 2022, Allergan filed a second amended complaint against us and ABPS, alleging infringement of three additional patents assigned and/or licensed to Allergan: U.S. Patent Nos. 11,203,748; 11,326,155; and 11,285,216. On January 20, 2023, we filed an answer and counterclaims to Allergan's second amended complaint. On March 3, 2023, we filed invalidity contentions, which challenge Allergan’s asserted patents. A Markman hearing was held on June 28, 2023, and we awaita decision was issued on August 29, 2023. On September 15, 2023, U.S. Patent No. 7,332,567 was dismissed from the court’s decision on claim construction.case with prejudice.
On December 10, 2021, a putative securities class action complaint was filed against the Company and certain of its officers on behalf of a class of stockholders who acquired the Company’s securities from November 25, 2019 to October 11, 2021, in the U.S. District Court for the Northern District of California. The complaint alleges that the Company and certain of its officers violated Sections 10(b) and 20(a) of Exchange Act by making false and misleading statements regarding the manufacturing of DAXXIFY® and the timing and likelihood of regulatory approval and seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. The court appointed the lead plaintiff and lead counsel on September 7, 2022. The lead plaintiff filed an amended complaint on November 7, 2022. On January 23, 2023, we filed a motion to dismiss.dismiss, and on March 30, 2024, the Court granted the motion with leave for the plaintiff to amend the complaint. On March 8, 2023,May 1, 2024, the lead plaintiff filed an oppositionamended complaint, which asserted similar claims to our motion to dismiss. On April 7, 2023, we filed a replythose in support of our motion to dismiss. A hearing on our motion to dismiss is scheduled for August 10, 2023, but we cannot be certain of whether that motion to dismiss will be granted.the prior complaint.
We dispute the claims in these lawsuits and intend to defend thethese matters vigorously. These lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcomeoutcomes of the lawsuits isare necessarily uncertain. We could be forced to expend significant resources in the defense of either lawsuit, and we may not prevail. In addition, we may incur substantial legal fees and costs in connection with each lawsuit.
We record a provision for a liability when we believe that it is both probable that a liability has incurred, and the amount can be reasonably estimated. As of both June 30, 2023March 31, 2024 and December 31, 2022,2023, no such provision for liabilities related to the above litigation matters were recorded on the condensed consolidated balance sheets.
12. Segment Information
Reportable Segments
We report segment information based on the management approach. The management approach designates the internal reporting used by the CODM for making decisions and assessing performance as the source of our reportable segments.
We have two reportable segments: the Product Segment and the Service Segment. Each reportable segment represents a component, or an operating segment, for which separate financial information is available that is utilized on a regular basis by our CODM in determining resource allocations and performance evaluation. We also considered whether the identified operating segments should be further aggregated based on factors including economic characteristics, the nature of products and services, production processes, customer base, distribution methods, and regulatory environment; however, no such aggregation was made due to dissimilarity of the operating segments.
REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Product Segment
Our Product Segment refers to the business that includes the research, development and commercialization of our approved products and product candidates, including DAXXIFY®, the onabotulinumtoxinA biosimilar and the RHA® Collection of dermal fillers.
Service Segment
Our Service Segment refers to the business that includes the development and commercialization of the Fintech Platform.
Corporate and Other Expenses
Corporate and other expenses include operating expenses related to general and administrative expenses, depreciation and amortization, stock-based compensation, and intersegment elimination that are not used in evaluating the results of, or in allocating resources to, our segments. Intersegment revenue represents the revenue generated between the two segments. For the three months ended June 30, 2023 and 2022, intersegment revenue was $0.7 million and $0.3 million, respectively. For the six months ended June 30, 2023 and 2022, intersegment revenue was $1.3 million and $0.6 million, respectively.
Reconciliation of Segment Revenue to Consolidated Revenue
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| (in thousands) | 2023 | | 2022 | | 2023 | | 2022 |
| Revenue: | | | | | | | |
| Product Segment | $ | 54,413 | | | $ | 27,142 | | | $ | 100,187 | | | $ | 51,547 | |
| Service Segment | 3,721 | | | 1,226 | | | 7,278 | | | 2,082 | |
| Total revenue | $ | 58,134 | | | $ | 28,368 | | | $ | 107,465 | | | $ | 53,629 | |
Reconciliation of Segment Loss from Operations to Consolidated Loss from Operations
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| (in thousands) | 2023 | | 2022 | | 2023 | | 2022 |
| Loss from operations: | | | | | | | |
| Product Segment | $ | (19,335) | | | $ | (24,969) | | | $ | (32,065) | | | $ | (49,920) | |
| Service Segment | (4,978) | | | (5,598) | | | (12,065) | | | (9,533) | |
| Corporate and other expenses | (41,186) | | | (27,275) | | | (79,401) | | | (60,610) | |
| Total loss from operations | $ | (65,499) | | | $ | (57,842) | | | $ | (123,531) | | | $ | (120,063) | |
We do not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the accompanying notes appearing elsewhere in this Report and in conjunction with our other SEC filings, including our FY2022FY2023 Form 10-K.
This Report, including the documents incorporated by reference herein, contains forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this Report and the documents incorporated by reference herein, including statements regarding our future financial condition, regulatory approvals, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. In addition, any statements that refer to our financial outlook or projected performance, profitability expectations, anticipated growth, milestone expectations, future expenses and cash flows, anticipated working capital requirements, market forecasts, capital expenditures, cash preservation plans, liquidity and capital allocation plans;financing requirements; our ability to comply with our debt obligations; our plans regarding the Second Tranche; the evaluation of the variable transaction price related to Viatris Agreement; the availability of the Second and Third Tranches; our ability to sell stock under the 2022 ATM Agreement; our future financing plans and strategies; our future responses to macroeconomic and geopolitical factors, including the effects of the COVID-19 pandemic;factors; our ability to successfully commercialize and maintain regulatory approvals for DAXXIFY®DAXXIFY®;our ability to obtain, and the timing relating to, regulatory submissions and approvals with respect to our drug product candidates and third-party manufacturers, including with respect to DAXXIFY®the PAS for the PCI manufacturing facility, DAXXIFY® for indications other than glabellar lines and cervical dystonia, and the RHA®RHA® Pipeline Products; our opportunity in aesthetics and therapeutics; our expectations regarding the Fintech Platform, including its features, functionality, GPVability to secure and profitability;maintain favorable third party reimbursement for our Products; the process and timing of, and ability to complete, the current and anticipated future pre-clinical and clinical development of our product candidates including the outcome of such clinical studies and trials; the design of our clinical studies; development of an onabotulinumtoxinA biosimilar, which would compete in the existing short-acting neuromodulator marketplace;biosimilar; the process and our ability to effectively and reliably manufacture supplies of DAXXIFY®DAXXIFY®; our ability to manufacture or receive sufficient supply of our Products in order to meet commercial demand; expectations regarding DAXXIFY® Zero-cost Inventory; our ability to successfully compete in the dermal filler and neuromodulator and fintech services markets; the design of our clinical studies; the markets for our current and future products and services; our business strategy, plans and prospects, including our commercialization plans related to DAXXIFY® and ability to commercialize DAXXIFY® and continued commercialization of the RHA® RHA® Collection of dermal fillers; the potential benefits of DAXXIFY®DAXXIFY®, the RHA®RHA® Collection of dermal fillers and our drug product candidates and the Fintech Platform;candidates; the potential safety, efficacy and duration of our Products;DAXXIFY® for consumers and patients; our ability to maintain and seek out new strategic third-party collaborations to support our goals; the extent to which our products and services are considered innovative, differentiated, exclusive or premium; consumer preferences related to our Products and Services;Products; the rate and degree of economic benefit, commercial acceptance, market, competition and/or size and growth potential of DAXXIFY® DAXXIFY®, the RHA®RHA® Collection of dermal fillers OPUL®and outour other drug product candidates, if approved; our ability to set a new standard in healthcare; the wind down of all activities related to the Fintech Platform; patent defensive measures; timing and expenses related to our ongoing litigation matters; our ability to defend ourselves in ongoing litigation; international expansion; the commencementexpansion, including with respect to NMPA approval of the Second Expansion Premises;DAXXIFY® for cervical dystonia and glabellar lines; anticipated milestone payments; our ability to expand our operations to support the commercialization of our Products and attract and retain qualified personnel to support our business; and our ability to comply with applicable laws and regulationsregulations; our ability to protect the Company from cybersecurity threats, including the impact of security failures and/or breaches; are forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in Item 1A. “Risk Factors” and elsewhere in this Report and our FY2022 10-K and our Quarterly Report onFY2023 Form 10-Q for the period ended March 31, 2023.10-K. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements represent our estimates and assumptions only as of the date of this Report. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason to conform these statements to actual results or to changes in our expectations. You should read this Report, together with the information incorporated herein by reference, with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Summary of Risk Factors
•Our success as a company, including our ability to finance our business and generate revenue, and our future growth is substantially dependent on the commercialclinical and clinicalcommercial success of our Products. Our longer-term prospects will also depend on the successful development, regulatory approval and commercialization of our onabotulinumtoxinA biosimilar product candidate and any future product candidates. If we are unable to successfully commercialize our Products, complete the development and regulatory approval process of our product candidates, and maintain regulatory approval of our Products we may not be able to generate sufficient revenue to continue our business.
•DAXXIFY®, the RHA® Collection of dermal fillers, and any future product candidates, if approved, may not achieve market acceptance among injectors, HCPs, consumers and consumers,patients, and may not be commercially successful, which would adversely affect our operating results and financial condition.
•We have incurred significant losses since our inception and we anticipate that we will continue to incur GAAP operating losses for the foreseeable future and may not achieve or maintain profitability in the future. Our prior losses, combined with expected future losses, may adversely affect the market price of our common stock, our ability to raise capital and our ability to maintain compliance with our debt covenants. We may require substantial additional funding to continue to operate our business and achieve our goals and a failure to obtain the necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, other operations or commercialization efforts. We have incurred significant losses since our inception and we anticipate that these losses will continue. Our prior losses, combined with expected future losses, may adversely affect the market price of our common stock and our ability to raise capital and continue operations.
•DAXXIFY®, the RHA® Collection of dermal fillers and any future product candidates will face significant competition, including from companies that enjoy significant competitive advantages, such as substantially greater financial, research and development, regulatory, manufacturing, marketing resources and expertise, greater brand recognition and more established relationships. Our failure to effectively compete may prevent us from achieving significant market penetration and expansion.
•We use third-party collaborators, including Teoxane, Viatris, Fosun, ABPS and PCI to help us develop, validate, manufacture and/or commercialize our products. Our ability to commercialize our products could be impaired or delayed if these collaborations are unsuccessful.
•Reports of adverse events or safety concerns involving DAXXIFY®, the RHA® Collection of dermal fillers or other Teoxane approved product candidates, could delay or prevent the Company or Teoxane from maintaining regulatory approval or obtaining additional regulatory approval for DAXXIFY® for indications other than glabellar lines or the RHA® Pipeline Products. The denial, delay or withdrawal of any such approval would negatively impact commercialization and could have a material adverse effect on our ability to generate revenue, business prospects, and results of operations.
•Macroeconomic and geopolitical factors includingand a public health crisis, such as the COVID-19 pandemic, have and may continue to adversely affect our business, as well as those of third-parties on which we rely for significant manufacturing, clinical or other business operations. They may also impact disposable income levels, which could reduce consumer spending and lower demand for our products.
•If weWe are not ablesubject to effectivelyuncertainty relating to pricing and reliably manufacturereimbursement. Failure to obtain or maintain adequate coverage, pricing and reimbursement for DAXXIFY® for therapeutics uses, or our other future approved products, if any, could have a material adverse impact on our ability to commercialize such products. Even if coverage and reimbursement is provided, acceptance of any approved product may vary among HCPs, healthcare organizations and administrators and others in the healthcare community, which could impact our ability to realize a return on our investment and reduce demand for our products.
•Reports of adverse events or safety concerns involving our Products could delay or prevent the Company or Teoxane from maintaining regulatory approval for such Products, or obtaining additional regulatory approval for additional indications or future product candidates at sufficient scale, including throughcandidates. The denial, delay or withdrawal of any third-party manufacturers, as well as acquire suppliessuch approval would
negatively impact commercialization and sales efforts andcould have a material adverse effect on our ability to generate revenue, business prospects, and results of operations.
•Unfavorable publicity relating to one or more of our Products, whether related to aesthetic or therapeutic indications, may be adversely affected.affect the public perception of our entire portfolio of Products.
•Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results or actual consumer outcomes.
•If our efforts to protect our intellectual property related to DAXXIFY®, the RHA® Collection of dermal fillers or any future product candidates or the Fintech Platform are not adequate, we may not be able to compete effectively. Additionally, we are currently and in the future may become involved in lawsuits or administrative proceedings to
defend against claims that we infringe the intellectual property of others and to protect or enforce our patents or other intellectual property or the patents of our licensors, which could be expensive and time-consuming and would have a material adverse effect on our ability to generate revenue if we are unsuccessful.
•The HintMD Acquisition may result in additional impairment charges from the recording of goodwill and intangible assets that could adversely affect our financial results.
•If we do not effectively manage our expanded operations in connection with the HintMD Acquisition, or if we are not able to achieve market acceptance of the Fintech Platform, then we may not achieve the anticipated benefits or recoup the substantial expense incurred in connection with the acquisition.
•Servicing our debt, including the 2027 Notes and Notes Payable, and 2027 Notes, requires a significant amount of cash to pay our substantial debt. If we are unable to generate suchsufficient cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
•We are currently, and in the future may be, subject to litigation.securities class action and stockholder derivative actions. If product liability,other stockholder derivative actions, additional securities class actions intellectual property lawsuits or other lawsuits are brought against us, including product liability actions, and we cannot successfully defend ourselves, we may incur substantial liabilities or be required to limit commercialization of our products. Even a successful defense would require significant financial and management resources.
•As our business and operations continue to grow, we may need to expand our development, manufacturing, regulatory, sales, marketing and distribution capabilities. If and when we expand such capabilities, we may encounter difficulties in managing our growth, which could disrupt our operations.
•We have undertaken, and may in the future undertake, restructuring plans to adjust our investment priorities and manage our operating expenses, which plans may not result in the savings or operational efficiencies anticipated and could result in total costs and expenses that are greater than expected.
•If we are not successful in discovering, developing, acquiring and commercializing additional product candidates other than our current Products, our ability to expand our business and achieve our strategic objectives may be impaired.
•Significant disruptionsWe have experienced and may experience in the future compromises or failures of our information technology systems or security incidents impacting usdata, or those of third parties upon which we rely, which could materially adversely affect our business, our reputation, our customer relationships, results of operations and financial condition.
•Changes in and failures to comply with applicable laws, regulations and standards may adversely affect our business, operations and financial performance.
•If we fail to attract and retain qualified personnel at all levels and functions, we may be unable to successfully execute our objectives.
Overview
Revance is a biotechnology company setting the new standard in healthcare withfocused on developing and commercializing innovative aesthetic and therapeutic offerings that elevate patient and physician experiences.offerings. Revance’s aesthetics portfolio of expertly created products and services, includingincludes DAXXIFY®, (DaxibotulinumtoxinA-lanm) for injection and the RHA® Collection of dermal fillers and OPUL®,in the first-of-its-kind relational commerce platform for aesthetic practices, deliver a differentiated and exclusive offering for Revance’s elite practice partners and their consumers.U.S. Revance has also partnered with Viatris to develop ana biosimilar to onabotulinumtoxinA biosimilar, which will compete in the existing short-acting neuromodulator marketplace. Revance’s therapeutics pipeline is currently focused on muscle movement disorders including evaluatingfor injection and Fosun to commercialize DAXXIFY® in two debilitating conditions, cervical dystonia and upper limb spasticity.
Recent Developments
Revance Aesthetics
For the three and six months ended June 30, 2023,March 31, 2024, we generated $58.1$51.7 million and $107.3 million, respectively, in revenue from the sale of our Products and our Services.Products. As of June 30, 2023,March 31, 2024, we had over 6,0007,500 aesthetic accounts across our Products and Services.
First Amendment to Note Purchase Agreement
On August 8, 2023, the Company, HintMD and Athyrium entered into the First Amendment. Pursuant to the First Amendment, the Second Tranche commitment was reduced from $100.0 million to $50.0 million, and the uncommitted Third Tranche was increased from $100.0 million to $150.0 million. On or before August 31, 2023, the Company expects to issue to the purchasers under the Note Purchase Agreement notes in an aggregate principal amount of $50.0 million, provided certain conditions are met. The notes to be issued pursuant to the Second Tranche will bear interest at an annual fixed interest rate equal to 8.50%.accounts.
The First Amendment eliminated the applicability of the Amortization Trigger to the amortization of the Second Tranche and provided for a principal amortization payment schedule for the Second Tranche. See “—Liquidity and Capital Resources—First Amendment to Note Purchase Agreement” for additional information. Except as explicitly amended, all of the terms and conditions of the Note Purchase Agreement remain in full force and effect.DAXXIFY®
Following DAXXIFY® GL Approval,For the three months ended March 31, 2024 and 2023, we trained a group of faculty members on DAXXIFY® as part of PrevU, our early experience program forrecognized $22.1 million and $15.4 million in net product revenue from the product, which we initiated in December 2022. PrevU focuses on providing practices with product education, tools for practice integration, and the opportunity to gain real-world clinical insights for DAXXIFY® with the goal of optimizing aesthetic outcomes. We completed the PrevU program in March 2023, and initiated the market introductionsale of DAXXIFY®, which has been focused on our existing customers.respectively. For the three and six months ended June 30,March 31, 2024, the DAXXIFY® aesthetic units sold increased by 105% and 7%, compared to the three months ended March 31, 2023 we recognized $22.6and December 31, 2023, respectively. For the three months ended March 31, 2024, our DAXXIFY® consumer coupon program, which functioned like a rebate, reduced product revenue by $2.0 million, and $38.0 million, respectively,which resulted in net product revenue of $22.1 million from the sale of DAXXIFY®.
The FDA approved our PAS submission for the ABPS manufacturing facility, which is serving as one of our DAXXIFY® commercial supply sources, in addition to our Northern California manufacturing facility. All inventory produced at the ABPS facility prior to DAXXIFY® GL Approval has been released for commercial use.
We are pursuing regulatory approval of DAXXIFY® for the treatment of cervical dystonia. On January 6, 2023, the FDA accepted for review the supplemental BLA for DAXXIFY® for the treatment of cervical dystonia that we submitted in October 2022. The PDUFA date is August 19, 2023. If the supplemental BLA is approved on or by the PDUFA date, we plan to initiate an early experience program in late 2023, followed by broad commercial launch in 2024.
Fosun Partnership
In April 2023, Fosun announced that the BLA for DaxibotulinumtoxinA for Injection for the improvement of glabellar lines was accepted for review by the NMPA. In July 2023, the NMPA accepted the BLA for DaxibotulinumtoxinA for Injection for the treatment of cervical dystonia.
RHA® Collection of Dermal Fillers
For the three and six months ended June 30,March 31, 2024 and 2023, we recognized $31.8$29.6 million and $62.0$30.3 million respectively, in product revenue from the sale of the RHA® Collection of dermal fillers.fillers, respectively.
In April 2024, the Company launched RHA 3® for injection into the vermillion body, vermillion border and oral commissure for lip augmentation and lip fullness in adults aged 22 years and older.
Revance Therapeutics
OPULIn May 2024, the Company expanded into the U.S. therapeutics market with the commercial launch of DAXXIFY®Relational Commerce Platform for the treatment of cervical dystonia. As of April 30, 2024, DAXXIFY® for the treatment of cervical dystonia had coverage for approximately 78% of commercial lives, which when combined with government coverage represents over 200 million lives.
For
Follow-On Offering
In March 2024, we completed a follow-on offering, pursuant to which we issued 16.0 million shares of common stock at a price to the three months ended June 30, 2023, we recognized $3.7public of $6.25 per share (except with respect to 30,000 shares which were sold and issued to Mark Foley, our chief executive officer and director, at $6.98 per share), for net proceeds of $97.1 million, in service revenueafter underwriting discounts and $3.7 million in cost of service revenue (exclusive of amortization) from the Fintech Platform. For the six months ended June 30, 2023, we recognized $7.3 million in service revenue and $7.4 million in cost of service revenue (exclusive of amortization) from the Fintech Platform. Since the Fintech Platform generates revenue as a percentage of credit card processing volumes, we use GPV as a key indicator of the abilityestimated offering costs.
Exit of the Fintech Platform Business
In September 2023, we commenced a plan to generate revenue. GPV measures the total dollar amount of all transactions processed in the period throughexit the Fintech Platform net of refunds. The Company also usesbusiness as the costs and resources required to support the Fintech Platform PayFac capabilitiesno longer aligned with the Company’s capital allocation priorities. The exit and restructuring activities included elimination of Fintech Platform personnel, the termination of Fintech Platform research and development activities and an elimination of outside services expenses related to process credit card transactionsthe Fintech Platform. Based on such plan, substantially all payment processing activities for Products purchased fromFintech Platform customers ended on January 31, 2024 and we substantially completed the Company; these transactions areactivities related to winding down the remaining Fintech Platform operations as of March 31, 2024. Beginning as of March 31, 2024, the Service Segment is presented as a discontinued operation in our condensed consolidated financial statements
with certain prior period amounts retrospectively revised to reflect this change. Although we discontinued the Services Segment, we do not includedexpect the discontinuation of the Services Segment to have a material effect on our liquidity going forward. See Part I, Item 1, “Financial Information—Notes to Condensed Consolidated Financial Statements (Unaudited)—Note 2 — Exit of the Fintech Platform Business” in GPV. GPVthis Report for OPUL® was approximately $173 million for the three months ended June 30, 2023. GPV for the trailing-twelve months ended June 30, 2023 totaled approximately $697 million.additional information. Results of Operations
We operateIn connection with the completion of exit of the Fintech Platform business discussed above, the results of our Fintech Platform business have been reflected as discontinued operations in twoour condensed consolidated financial statements as of and for the period ending March 31, 2024. Certain prior year figures were reclassified to conform to the current period presentation. Additionally, we began operating under a single reportable segments: our Productsegment as of March 31, 2024. See Part I, Item 1, “Financial Information—Notes to Condensed Consolidated Financial Statements (Unaudited)—Note 2 — Exit of the Fintech Platform Business” in this Report for additional information. Accordingly, the results of operations discussed below no longer include a discussion of the Services Segment and the effect of the Services Segment on prior period amounts have been retrospectively revised for comparative purposes to more accurately reflect the period over period changes in our Service Segment. Our Product Segment refers tocontinuing operations.Revenue
We generate product revenue from the business that includes the research, development and commercializationsale of our approved products and product candidates, including DAXXIFY®, theProducts. We generate collaboration revenue from an onabotulinumtoxinA biosimilar andprogram with Viatris as well as the RHA® Collection of dermal fillers. Our Service Segment refers to the business that includescollaboration with Fosun for the development and commercialization of DaxibotulinumtoxinA for Injection. The service revenue generated from the Fintech Platform.Platform is classified as discontinued operations as discussed in Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 2—Exit of the Fintech Platform Business”. Revenue
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| (in thousands, except percentages) | 2023 | | 2022 | | Change | | % Change | | 2023 | | 2022 | | Change | | % Change |
| Product revenue | $ | 54,393 | | | $ | 25,483 | | | $ | 28,910 | | | 113 | % | | $ | 100,051 | | | $ | 46,320 | | | $ | 53,731 | | | 116 | % |
| Service revenue | 3,721 | | | 1,226 | | | $ | 2,495 | | | 204 | % | | 7,278 | | | 2,082 | | | $ | 5,196 | | | 250 | % |
| Collaboration revenue | 20 | | | 1,659 | | | $ | (1,639) | | | (99) | % | | 136 | | | 5,227 | | | $ | (5,091) | | | (97) | % |
| Total revenue | $ | 58,134 | | | $ | 28,368 | | | $ | 29,766 | | | 105 | % | | $ | 107,465 | | | $ | 53,629 | | | $ | 53,836 | | | 100 | % |
Product Revenue
Our breakdown of revenue by Product is summarized below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| (in thousands, except percentages) | 2023 | | 2022 | | Change | | % Change | | 2023 | | 2022 | | Change | | % Change |
| Product: | | | | | | | | | | | | | | | |
RHA® Collection of dermal fillers | $ | 31,767 | | | $ | 25,483 | | | $ | 6,284 | | | 25 | % | | $ | 62,047 | | | $ | 46,320 | | | $ | 15,727 | | | 34 | % |
DAXXIFY® | 22,626 | | | — | | | $ | 22,626 | | | N/M | | 38,004 | | | — | | | $ | 38,004 | | | N/M |
| Total product revenue | $ | 54,393 | | | $ | 25,483 | | | $ | 28,910 | | | 113 | % | | $ | 100,051 | | | $ | 46,320 | | | $ | 53,731 | | | 116 | % |
N/M - Percentage not meaningful
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, |
| (in thousands) | 2024 | | 2023 | | Change | | % Change |
| Product: | | | | | | | |
RHA® Collection of dermal fillers | $ | 29,570 | | | $ | 30,280 | | | $ | (710) | | | (2) | % |
DAXXIFY® | 22,149 | | | 15,378 | | | $ | 6,771 | | | 44 | % |
| Total product revenue, net | $ | 51,719 | | | $ | 45,658 | | | $ | 6,061 | | | 13 | % |
For the three and six months ended June 30, 2023,March 31, 2024, our Productproduct revenue from the sale of the RHA® Collection of dermal fillers decreased compared to the same period in 2023 primarily due to a decrease in units sold.
For the three months ended March 31, 2024, our product revenue from the sale of DAXXIFY®increased compared to the same periodsperiod in 20222023 primarily due to increased U.S. market penetrationan increase in units sold, partially offset by a reduction in average selling price as well asa result of the launch of RHA® Redensitynew pricing introduced in September 2023 and the third quarter of 2022.
We started to generate product revenue from DAXXIFY® consumer coupon program, which functioned like a rebate that was offered in the fourthfirst quarter of 2022 from the PrevU program, which is a pre-launch promotional program2024. The rebate initiative resulted in approximately $2.0 million in contra revenue for select practice partners. We completed the PrevU program in March 2023, and initiated the market introduction of DAXXIFY®, which has been focused on our existing customers.
Service Revenue
Our service revenue is generated from the Fintech Platform, which earns revenues through payment processing fees and certain value-added services. In our HintMD Platform service offerings, we generally recognize service revenue net of costs as an accounting agent. In our OPUL® service offerings, we generally recognize service revenue on a gross basis as the accounting principal because, as the PayFac, we maintain control of the service offerings to our customers. Since the fourth quarter of 2021, we have been onboarding new customers exclusively to OPUL® and the migration of the remaining HintMD customers to OPUL® was completed during the three months ended June 30, 2023. The migration did not have a material impact on the gross margin generated by the Fintech Platform in the near term.March 31, 2024.
For the three and six months ended June 30, 2023, our service revenue increased compared to the same periods in 2022, primarily due tothe presentation difference in the revenue accounting method described above as well as the increased OPUL® GPV.
Collaboration Revenue
We are actively developing an onabotulinumtoxinA biosimilar in collaboration with Viatris. As described in Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 23—Revenue,” we generally recognize collaboration revenue for the onabotulinumtoxinA biosimilar program based on the determined transactions price of the contract multiplied by the quotient of the cost of development services incurred over the total estimated cost of development services for the expected duration of our performance obligations in the biosimilar development program per the Viatris Agreement. ASC Topic 606, Revenue from Contracts with Customers (ASC 606) requires that an entity include a constraint on the amount
obligations. For the three and six months ended June 30, 2023,March 31, 2024, we recognized no revenue related to development services under the Viatris Agreement.Agreement of $0.2 million. For the three and six months ended June 30, 2022, weMarch 31, 2023, no collaboration revenue was recognized $1.7 million and $5.2 million related tofrom the development services under the Viatris Agreement, respectively.biosimilar program.
We are also working with Fosun to develop and commercialize DaxibotulinumtoxinA for Injection in the Fosun Territory under the Fosun License Agreement. As described in Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 23—Revenue,” we evaluated all of the variable payments to be received during the duration of the contract, which included payments from specified milestones, royalties, and estimated supplies to be delivered. For the three and six months ended June 30,March 31, 2024, no collaboration revenue is recognized from the Fosun License Agreement. For the three months ended March 31, 2023, revenue of less than $0.1 million and $0.1 million was recognized from the Fosun License Agreement, respectively. For the three and six months ended June 30, 2022, no revenue was recognized from the Fosun License Agreement.
Operating Expenses
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| (in thousands, except percentages) | 2023 | | 2022 | | Change | | % Change | | 2023 | | 2022 | | Change | | % Change |
| Operating expenses: | | | | | | | | | | | | | | | |
| Cost of product revenue (exclusive of depreciation and amortization) | $ | 17,607 | | | $ | 8,121 | | | $ | 9,486 | | | 117 | % | | $ | 30,094 | | | $ | 15,449 | | | $ | 14,645 | | | 95 | % |
| Cost of service revenue (exclusive of amortization) | 3,700 | | | 1,402 | | | $ | 2,298 | | | 164 | % | | 7,384 | | | 1,967 | | | $ | 5,417 | | | 275 | % |
| Selling, general and administrative | 77,384 | | | 47,847 | | | $ | 29,537 | | | 62 | % | | 143,395 | | | 92,922 | | | $ | 50,473 | | | 54 | % |
| Research and development | 22,807 | | | 24,913 | | | $ | (2,106) | | | (8) | % | | 45,984 | | | 55,642 | | | $ | (9,658) | | | (17) | % |
| Depreciation and amortization | 2,135 | | | 3,927 | | | $ | (1,792) | | | (46) | % | | 4,139 | | | 7,712 | | | $ | (3,573) | | | (46) | % |
| Total operating expenses | $ | 123,633 | | | $ | 86,210 | | | $ | 37,423 | | | 43 | % | | $ | 230,996 | | | $ | 173,692 | | | $ | 57,304 | | | 33 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, |
| (in thousands, except percentages) | 2024 | | 2023 | | Change | | % Change |
| Operating expenses: | | | | | | | |
| Cost of product revenue (exclusive of amortization) | $ | 14,911 | | | $ | 12,487 | | | $ | 2,424 | | | 19 | % |
| Selling, general and administrative | 68,914 | | | 61,920 | | | $ | 6,994 | | | 11 | % |
| Research and development | 14,393 | | | 17,532 | | | $ | (3,139) | | | (18) | % |
| Amortization | 545 | | | 545 | | | $ | — | | | — | % |
| Total operating expenses | $ | 98,763 | | | $ | 92,484 | | | $ | 6,279 | | | 7 | % |
Cost of product revenue (exclusive of depreciation and amortization)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| (in thousands, except percentages) | 2023 | | 2022 | | Change | | % Change | | 2023 | | 2022 | | Change | | % Change |
| Cost of product revenue (exclusive of depreciation and amortization): | | | | | | | | | | | | | | | |
| Purchasing and manufacturing costs (exclusive of stock-based compensation) | $ | 15,192 | | | $ | 7,851 | | | $ | 7,341 | | | 94 | % | | $ | 25,613 | | | $ | 14,370 | | | $ | 11,243 | | | 78 | % |
| Distribution, royalty and other fulfillment charges | 1,467 | | | 270 | | | $ | 1,197 | | | 443 | % | | 3,533 | | | 1,079 | | | $ | 2,454 | | | 227 | % |
| Stock-based compensation | 948 | | | — | | | $ | 948 | | | N/M | | 948 | | | — | | | $ | 948 | | | N/M |
| Total cost of product revenue (exclusive of depreciation and amortization) | $ | 17,607 | | | $ | 8,121 | | | $ | 9,486 | | | 117 | % | | $ | 30,094 | | | $ | 15,449 | | | $ | 14,645 | | | 95 | % |
N/M - Percentage not meaningful | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, |
| (in thousands, except percentages) | 2024 | | 2023 | | Change | | % Change |
| Cost of product revenue (exclusive of amortization) | | | | | | | |
| Purchasing and manufacturing costs | $ | 13,461 | | | $ | 10,697 | | | $ | 2,764 | | | 26 | % |
| Distribution, royalty and other fulfillment charges | 1,450 | | | 1,790 | | | $ | (340) | | | (19) | % |
| Total cost of product revenue (exclusive of amortization) | $ | 14,911 | | | $ | 12,487 | | | $ | 2,424 | | | 19 | % |
Cost of product revenue (exclusive of depreciationamortization) is generally incurred when our Products are delivered and amortization) primarily consists of the purchasing cost of the RHA® Collection of dermal fillers and manufacturing costs of DAXXIFY® inventory (exclusive of stock-based compensation),and distribution expenses, royalty, other fulfillment costs related to the RHA® Collection of dermal fillers and DAXXIFY®, and stock-based compensation expenses related to manufacturing efforts.
We obtained DAXXIFY® GL Approval in September 2022, and the first delivery of DAXXIFY® to a consumer took place in the fourth quarter of 2022. Cost of product revenue (exclusive of depreciation and amortization) related to DAXXIFY® generally incur when delivered.. Substantially all of DAXXIFY® manufacturing expenses incurred prior to DAXXIFY® GL Approval were classified as research and development expenses, resulting in Zero-cost Inventory.
Our cost of product revenue (exclusive of depreciation and amortization) for the three and six months ended June 30, 2023March 31, 2024 increased compared to the same periodsperiod in 2022,2023, which was primarily due to the higher sales volumesvolume of the RHADAXXIFY® Collection of dermal fillers and DAXXIFY® in the respective periods.. When Zero-cost Inventory, (discussed below)which is further discussed below, is depleted, we
expect our cost of product revenue (exclusive of depreciation and amortization) associated with DAXXIFY® to increase. We also anticipate that our cost of product revenue (exclusive of depreciation and amortization) associated with the RHA® Collection of dermal fillers mayto increase if higheras sales volumes result.volume increases.
Purchasing and manufacturing costs (exclusive of stock-based compensation)
For the three and six months ended June 30, 2023,March 31, 2024, purchasing and manufacturing costs (exclusive of stock-based compensation) related to the RHA® Collection of dermal fillers and DAXXIFY® increased compared to the same periodsperiod in 20222023 primarily due to higher sales volumesvolume of the RHA® Collection of dermal fillers and DAXXIFY®.our Products.
Distribution, royalty and other fulfillment charges
For the three and six months ended June 30, 2023,March 31, 2024, distribution, royalty and other fulfillment charges related to the RHA® Collection of dermal fillers and DAXXIFY® increaseddecreased compared to the same periodsperiod in 20222023 primarily due to higher sales volumes of the RHA® Collection of dermal fillersa reduction in distribution implementation costs and DAXXIFY®.
Stock-based compensation
We started to incur stock-based compensationother royalty expense in cost of product revenue (exclusive of depreciation and amortization) during the three months ended June 30, 2023, which is related to the equity grants of employees in departments involved in the manufacturing of DAXXIFY®. DAXXIFY® manufacturing related stock-based compensation expense incurred prior to DAXXIFY® GL Approval was classified as research and development expenses.launch.
Impact of Zero-cost Inventory for DAXXIFY®
If cost of product revenue (exclusive of amortization) included previously expensed inventories, the cost of product revenue (exclusive of depreciation and amortization) for the three and six months ended June 30,March 31, 2024 and 2023 would have increased by approximately $4$6 million and $8$4 million, respectively. We expect to utilize existing Zero-cost Inventory related tountil depleted in the near-term. Once depleted, we expect our cost of product revenue (exclusive of amortization) associated with DAXXIFY® in the near-term until depleted.to increase.
Cost of Service Revenue (exclusive of amortization)
Costs of service revenue (exclusive of amortization) primarily consists of payment processing costs and the cost of POS devices. For the six months ended June 30, 2023, cost of service revenue (exclusive of amortization) increased compared to the same periods in 2022 due to the change to the gross accounting presentation of revenue as well as the increase of OPUL® GPV and costs associated with OPUL® as described in the Service Revenue section above.
Selling, General and Administrative Expenses
| | | | Three Months Ended June 30, | | Six Months Ended June 30, | | Three Months Ended March 31, |
| (in thousands, except percentages) | (in thousands, except percentages) | 2023 | | 2022 | | Change | | % Change | | 2023 | | 2022 | | Change | | % Change | (in thousands, except percentages) | 2024 | | 2023 | | Change | | % Change |
| Selling, general and administrative | Selling, general and administrative | $ | 64,166 | | | $ | 40,301 | | | $ | 23,865 | | | 59 | % | | $ | 117,770 | | | $ | 76,078 | | | $ | 41,692 | | | 55 | % | Selling, general and administrative | $ | 62,281 | | | $ | | $ | 53,604 | | | $ | | $ | 8,677 | | | 16 | | 16 | % |
| Stock-based compensation | Stock-based compensation | 12,178 | | | 6,528 | | | $ | 5,650 | | | 87 | % | | 22,443 | | | 14,692 | | | $ | 7,751 | | | 53 | % | Stock-based compensation | 7,624 | | | 10,265 | | 10,265 | | | $ | | $ | (2,641) | | | (26) | | (26) | % |
| Depreciation and amortization | Depreciation and amortization | 1,040 | | | 1,018 | | | $ | 22 | | | 2 | % | | 3,182 | | | 2,152 | | | $ | 1,030 | | | 48 | % | Depreciation and amortization | 1,082 | | | 2,142 | | 2,142 | | | $ | | $ | (1,060) | | | (49) | | (49) | % |
| Less: selling, general, and administrative expenses classified as discontinued operations | | Less: selling, general, and administrative expenses classified as discontinued operations | (2,073) | | | (4,091) | | | $ | 2,018 | | | (49) | % |
| Total selling, general and administrative expenses | Total selling, general and administrative expenses | $ | 77,384 | | | $ | 47,847 | | | $ | 29,537 | | | 62 | % | | $ | 143,395 | | | $ | 92,922 | | | $ | 50,473 | | | 54 | % | Total selling, general and administrative expenses | $ | 68,914 | | | $ | | $ | 61,920 | | | $ | | $ | 6,994 | | | 11 | | 11 | % |
Selling, general and administrative expenses (before stock-based compensation and depreciation and amortization)
Selling, general and administrative expenses (before stock-based compensation and depreciation and amortization) consist primarily of the following:
•Costs of sales and marketing activities and sales force compensation related to DAXXIFY®, the RHA® Collection of dermal fillers and the OPUL®;our Products; and
•Personnel and professional service costs in our finance, information technology, investor relations, legal, human resources, and other administrative departments;
We expect selling, general and administrative expenses to increase in the near term in connection with the expansion of our commercial sales team and incremental administrative and infrastructure support. For the three and six months ended June 30, 2023,March 31, 2024, selling, general and administrative expenses increased compared to the same periodsperiod in 2022,2023, primarily due to an increaseincreases in sales and marketing activities for our Products, including for therapeutics. We expect selling, general and administrative expenses of which $15.7 million and $26.8 million, respectively, was attributed to increase over the Product Segmentnext year in connection with the continued investment in our commercial sales team related to therapeutics and incremental administrative and infrastructure investment to support, the DAXXIFYpartially offset by areas of cost efficiencies identified.
Stock-based compensation
For the three and six months ended June 30, 2023,March 31, 2024, stock-based compensation included in selling, general and administrative expenses increaseddecreased $2.6 million compared to the same periodsperiod in 2022,2023, primarily due to the (i) increased headcount in selling, general and administrative functions; (ii) the stock-based compensation expense recognized for the vesting of the DAXXIFY® GL Approval PSUs inPSU on March 2023;7, 2023, (ii) impact of the exit of the Fintech Platform business, and (iii) the stock-based compensation expense recognized for the vestinglower grant-date fair value of stock awards granted in 2024 compared to 2023, partially offset by expenses associated with certain market-based PSUsequity award modifications in May 2023.selling, general and administrative functions.
Research and Development Expenses
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
| (in thousands, except percentages) | (in thousands, except percentages) | 2023 | | 2022 | | Change | | % Change | | 2023 | | 2022 | | Change | | % Change | (in thousands, except percentages) | 2024 | | 2023 | | Change | | % Change |
| Research and development | Research and development | $ | 19,031 | | | $ | 21,672 | | | $ | (2,641) | | | (12) | % | | $ | 36,918 | | | $ | 45,745 | | | $ | (8,827) | | | (19) | % | Research and development | $ | 14,337 | | | $ | | $ | 17,887 | | | $ | | $ | (3,550) | | | (20) | | (20) | % |
| Stock-based compensation | Stock-based compensation | 3,421 | | | 2,735 | | | $ | 686 | | | 25 | % | | 6,238 | | | 8,934 | | | $ | (2,696) | | | (30) | % | Stock-based compensation | 1,366 | | | 2,817 | | 2,817 | | | $ | | $ | (1,451) | | | (52) | | (52) | % |
| Depreciation and amortization | Depreciation and amortization | 355 | | | 506 | | | $ | (151) | | | (30) | % | | 2,828 | | | 963 | | | $ | 1,865 | | | 194 | % | Depreciation and amortization | 354 | | | 2,473 | | 2,473 | | | $ | | $ | (2,119) | | | (86) | | (86) | % |
| Less: research and development expenses classified as discontinued operations | | Less: research and development expenses classified as discontinued operations | (1,664) | | | (5,645) | | | $ | 3,981 | | | (71) | % |
| Total research and development expenses | Total research and development expenses | $ | 22,807 | | | $ | 24,913 | | | $ | (2,106) | | | (8) | % | | $ | 45,984 | | | $ | 55,642 | | | $ | (9,658) | | | (17) | % | Total research and development expenses | $ | 14,393 | | | $ | | $ | 17,532 | | | $ | | $ | (3,139) | | | (18) | | (18) | % |
Research and development expenses (before stock-based compensation and depreciation and amortization)
In the Product Segment, weWe generally do not allocate costs by product candidates unless contractually required by our business partners. In the Service Segment, our research and development expenses relate to the development and introduction of new functionalities and features of OPUL® that are not subject to capitalization.
Research and development expenses (before stock-based compensation and depreciation and amortization) consist primarily of:
•salaries and related expenses for personnelPersonnel costs in our research and development functions;
•expenses related to the initiation and completion of clinical trials and studies for DAXXIFY®, the RHA® Pipeline Products and an onabotulinumtoxinA biosimilar, including expenses related to the production of clinical supplies;
•expenses related to the manufacturing of supplies for clinical activities, regulatory approvals, and pre-commercial inventory;
•certain expenses related to the establishment and maintenance of our manufacturing facilities;
•expenses related to medical affairs, medical information, publications and pharmacovigilance oversight;
•expenses related to license fees, milestone payments, and development efforts under in-licensing agreements;
•expenses related to compliance with drug development regulatory requirements in the U.S. and other foreign jurisdictions;
•fees paid to clinical consultants, CROs and other vendors, including all related fees for investigator grants, patient screening fees, laboratory work and statistical compilation and analysis;
•expenses related to the development of new features and functionalities of OPUL® and services that are not eligible for capitalization; and
•other consulting fees paid to third parties.parties;
For the three months ended March 31, 2024, research and development expenses (before stock-based compensation and depreciation and amortization) decreased compared to the same period in 2023, primarily due to the FDA approval of our PAS submission for the ABPS manufacturing facility in late March 2023 which allowed manufacturing related expenses for DAXXIFY® to be capitalized on the condensed consolidated balance sheet. Prior to the approval, such manufacturing related expenses were classified as research and development expense in the condensed consolidated statements of operations and comprehensive loss.
Our research and development expenses (before stock-based compensation and depreciation and amortization) are subject to numerous uncertainties, primarily related to the timing and cost needed to complete our respective projects. In our Product Segment, theThe development timelines, probability of success and development expenses can differ materially from expectations, and the completion of clinical trials may take several years or more depending on the type, complexity, novelty and intended use of a product candidate. Accordingly, the cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development. We expect our research and development costexpenses (before
stock-based compensation and depreciation and amortization) to be relatively consistent in the near term, primarily due to deferring the Phase 3 clinical program for upper limb spasticity and other therapeutics pipeline activities. However, we will continue product development activities related to OPUL®, sharing certain development costs with Teoxane related to the RHA® Pipeline Products, and other activities related to the pursuit of approval for our third partythe PCI manufacturing partner site.facility.
When we conduct additional clinical trials, such as for our biosimilar program or additional DAXXIFY® therapeutic indications, we expect our research and development expenses (before stock-based compensation and depreciation and amortization) to increase. Depending on the stage of completion and level of effort related to each development phase undertaken, we may reflect variations in our research and development expenses. We expense both internal and external research and development expenses as they are incurred.
Stock-based compensation
For the three months ended June 30, 2023, research and development expenses (before stock-based compensation and depreciation and amortization) decreased compared to the same period in 2022, primarily due to the effects of capitalizing certain manufacturing related expenses for DAXXIFY® since the third quarter of 2022, offset by an increase in clinical, regulatory and other research and development activities.
For the six months ended June 30, 2023, research and development expenses (before stock-based compensation and depreciation and amortization) decreased compared to the same period in 2022, primarily due to the effects of capitalizing certain manufacturing related expenses for DAXXIFY® since the third quarter of 2022.
Stock-based compensation
For the three months ended June 30, 2023, stock-based compensation included in research and development expenses increased compared to the same periods in 2022, primarily due to stock-based compensation expense related to achievement of certain performance-based PSUs in May 2023, partially offset by the capitalized stock-based compensation in the second quarter of 2023.
For the six months ended June 30, 2023,March 31, 2024, stock-based compensation included in research and development expenses decreased compared to the same period in 2022,2023, primarily due to the (i) a stock modification accounting adjustment related to the separation of an executive officerstock-based compensation expense recognized from the Company in the first quartervesting of 2022; and (ii) the capitalized stock-based compensation for the first and second quarter of 2023. These decreases were partially offset by (i) the stock-based compensation recognition for the DAXXIFY® GL Approval PSUs, which vestedPSU in March 2023, (ii) impact of the exit of the Fintech Platform business, and (ii) a(iii) lower grant-date fair value from stock modification accounting adjustment relatedawards granted in 2024 in comparison to achievement of certain performance-based PSUs in May 2023.
Depreciation and Amortization
For the three and six months ended June 30, 2023, depreciation and amortization decreased compared to the same periods in 2022, primarily due to extension of useful life of Teoxane distribution rights, capitalization of depreciation into inventory and completion of amortization for developed technology related to HintMD in 2022, offset primarily by an increased amortization expense from a finance leaselower capitalized stock-based compensation in the first quarter of 2023.2024.
Amortization
Amortization presented separately on the condensed consolidated statements of operations and comprehensive loss represents the amortization for the distribution rights, which is within the functional area of cost of product revenue. Refer to Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 2—Exit of the Fintech Platform Business” for the amortization expense classified as discontinued operations.
Net Non-Operating Income and Expense
| | | | Three Months Ended June 30, | | Six Months Ended June 30, | | Three Months Ended March 31, |
| (in thousands, except percentages) | (in thousands, except percentages) | 2023 | | 2022 | | Change | | % Change | | 2023 | | 2022 | | Change | | % Change | (in thousands, except percentages) | 2024 | | 2023 | | Change | | % Change |
| Interest income | Interest income | $ | 3,148 | | | $ | 619 | | | $ | 2,529 | | | 409 | % | | $ | 6,118 | | | $ | 695 | | | $ | 5,423 | | | 780 | % | Interest income | $ | 2,996 | | | $ | | $ | 2,970 | | | $ | | $ | 26 | | | 1 | | 1 | % |
| Interest expense | Interest expense | (4,368) | | | (3,874) | | | $ | (494) | | | 13 | % | | (8,865) | | | (5,805) | | | $ | (3,060) | | | 53 | % | Interest expense | (5,256) | | | (4,497) | | (4,497) | | | $ | | $ | (759) | | | 17 | | 17 | % |
| Other expense, net | Other expense, net | (599) | | | (338) | | | $ | (261) | | | 77 | % | | (833) | | | (604) | | | $ | (229) | | | 38 | % | Other expense, net | (438) | | | (234) | | (234) | | | $ | | $ | (204) | | | 87 | | 87 | % |
| Total net non-operating expense | Total net non-operating expense | $ | (1,819) | | | $ | (3,593) | | | $ | 1,774 | | | (49) | % | | $ | (3,580) | | | $ | (5,714) | | | $ | 2,134 | | | (37) | % | Total net non-operating expense | $ | (2,698) | | | $ | | $ | (1,761) | | | $ | | $ | (937) | | | 53 | | 53 | % |
Interest Income
Interest income primarily consists of interest income earned on our deposit, money market fund, and investment balances. We expect interest income to vary each reporting period depending on our average deposit, money market fund, and investment balances during the period and market interest rates. For the three and six months ended June 30, 2023, interest income increased compared to the same periods in 2022, primarily due to higher interest rates and higher investment balances.
Interest Expense
Interest expense includes cash and non-cash components. The cash component of the interest expense primarily consists of the contractual interest charges for our 2027 Notes and Notes Payable, as well as our finance lease liability interest expense. The non-cash component of the interest expense primarily consists of the amortization of debt issuance costs for our 2027 Notes and the amortization of debt insurance cost and debt discount for the Notes Payable.
For three and the sixthree months ended June 30, 2023,March 31, 2024, interest expense increasedincrease compared to the same periodsperiod in 20222023 due to interest associated with the contractual interest onissuance of the Second Tranche of the Notes Payable, which we began to incurpayable in late March 2022,August 2023, and offset by a decrease in interest expense for our finance lease liability interest expense.liability.
Other Expense, net
Other expense, net primarily consists of miscellaneous tax and other expense items.
Liquidity and Capital Resources
Our financial condition is summarized as follows:
| | (in thousands) | (in thousands) | June 30, 2023 | | December 31, 2022 | | Increase /(Decrease) | (in thousands) | March 31, 2024 | | December 31, 2023 | | Increase/(Decrease) |
| Cash, cash equivalents, and short-term investments | Cash, cash equivalents, and short-term investments | $ | 319,723 | | | $ | 340,707 | | | $ | (20,984) | |
| Working capital | Working capital | $ | 304,868 | | | $ | 299,045 | | | $ | 5,823 | |
| Stockholders’ equity | $ | 26,786 | | | $ | 12,600 | | | $ | 14,186 | |
| Stockholders’ deficit | |
Sources and Uses of Cash
We hold our cash, cash equivalents, and short-term investments in a variety of non-interest bearing bank accounts and interest-bearing instruments subject to investment guidelines for high credit quality. Our investment portfolio is structured to provide for investment maturities and access to cash to fund our anticipated working capital needs.
As of June 30, 2023March 31, 2024 and December 31, 2022,2023, we had cash, cash equivalents and short-term investments of $319.7$277.1 million and $340.7$253.9 million, respectively, which reflected a decreasean increase between these periods of $21.0$23.2 million. The decrease
increase was primarily due to proceeds from a follow-on public offering, net of underwriting discount of $97.6 million. The increase was primarily offset by cash used in our operating activities of $121.2$64.5 million, taxes paid related to net settlementfinance lease prepayment of stock awards of $4.3$3.5 million, principal payments on a finance lease of $8.9$4.2 million, and the purchaseother cash outflows of property and equipment$2.2 million.
We derived the following summary of our condensed consolidated cash flows for the periods indicated from Part I, Item 1, “Financial Information—Condensed Consolidated Financial Statements (Unaudited)” in this Report:
| | | | Six Months Ended June 30, | | Three Months Ended March 31, |
| (in thousands) | (in thousands) | 2023 | | 2022 | (in thousands) | 2024 | | 2023 |
| Net cash provided by (used in): | Net cash provided by (used in): | | | |
| Operating activities | Operating activities | $ | (122,882) | | | $ | (105,495) | |
| Operating activities | |
| Operating activities | |
| Investing activities | Investing activities | $ | 55,784 | | | $ | (61,313) | |
| Financing activities | Financing activities | $ | 100,736 | | | $ | 126,478 | |
Cash Flows from Operating Activities
Our cash used in operating activities is primarily driven by personnel costs, manufacturing and facility costs, sales and marketing activities, clinical development activities,and general and administrative support, offset by revenue generated from the sale of our Products and Services.Products. Our cash flows from operating activities will continue to be affected principally by the revenue generated from our Products and Services, our working capital requirements, with a primary focus on commercial operations.
Cash used in operating activities for three months ended March 31, 2024 consisted of approximately $114 million in expenditures related to overall operations, offset by approximately $49 million in cash receipts from our revenue. The increase in net cash used in operating activities for the three months ended March 31, 2024, compared to 2023 is primarily driven by expenditures related to supporting the Company’s commercial growth, and the extent to which wepartially offset by an increase spending on personnel, commercial activities, and research and development activities as our business grows.in cash receipt from Product sales.
Cash used in operating activities for the sixthree months ended June 30,March 31, 2023, primarily consisted of approximately $197$85 million in expenditures related to overall operations and other working capital adjustments of $28 million, partially offset by approximately $102$44 million in net cash receipts from our Products and Services sales and other non-cash adjustments. The increase in net cash used in operating activities for the six months ended June 30, 2023, compared to 2022 is primarily driven by the increase in revenue generated from our Products, partially offset by expenditures in supporting company growth.
Cash used in operating activities for the six months ended June 30, 2022 primarily consisted of approximately $143 million in expenditures related to overall operations and other working capital adjustment of $8 million, offset by approximately $46 million in net cash receipts from our product and service sales and other non-cash adjustments.
Cash Flows from Investing Activities
For the sixthree months ended June 30,March 31, 2024 and 2023, and 2022, net cash provided by or used in investing activities was primarily due to fluctuations in the timing of purchases and maturities of investments, purchases of property and equipment and prepayments for a finance lease.
Cash Flows from Financing Activities
For the sixthree months ended June 30, 2023,March 31, 2024, net cash provided by financing activities was driven by proceeds from follow-on public offering, net of underwriting discount, the proceeds from the ATM offering program, net of commissions, and the exercise of stock options, and purchases of our common stock through the ESPP. The inflows werewhich was offset by the net settlement of stock awards for employee taxes, and principal payments on finance lease obligations.
For the sixthree months ended June 30, 2022,March 31, 2023, net cash provided by financing activities was driven by the issuance of the Notes Payable pursuant to the Note Purchase Agreement, net of debt discount, the ATM offering program, net of commissions andproceeds from the exercise of stock options, and purchases of our common stock through the ESPP. The inflows werewhich was offset by the net settlement of stock awards for employee taxes.taxes, and principal payments on finance lease obligations.
Convertible Senior Notes
In February 2020, we issued the 2027 Notes, in the aggregate principal amount of $287.5 million, pursuant to the Indenture. The 2027 Notes are senior unsecured obligations and bear interest at a rate of 1.75% per year, payable semiannually in arrears on February 15 and August 15 of each year, began on August 15, 2020. The 2027 Notes will mature on February 15, 2027, unless earlier converted, redeemed or repurchased. In connection with issuing the 2027 Notes, we received $278.3 million in net proceeds, after deducting the initial purchasers’ discount, commissions, and other issuance costs.
The 2027 Notes may be converted at any time by the holders prior to the close of business on the business day immediately preceding November 15, 2026 only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2020 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the measurement period in which the trading price (as defined in the Indenture) per $1,000 principal amount of the 2027 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (iii) if we call any or all of the 2027 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events. On or after November 15, 2026 until the close of business on the second scheduled trading day immediately preceding the Maturity Date, holders may convert all or any portion of their 2027 Notes at any time, regardless of the foregoing circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
The conversion rate will initially be 30.8804 shares of our common stock per $1,000 principal amount of the 2027 Notes (equivalent to an initial conversion price of approximately $32.38 per share of our common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the Maturity Date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2027 Notes in connection with such a corporate event or notice of redemption, as the case may be.
Contractually, we could not redeem the 2027 Notes prior to February 20, 2024. We may redeem for cash all or any portion of the 2027 Notes, at our option, on or after February 20, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the 2027 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. This threshold to redeem had not been met as of March 31, 2024. No sinking fund is provided for the 2027 Notes.
If we undergo a fundamental change (as defined in the Indenture), holders may require us to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2027 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
We used $28.9 million of the net proceeds from the 2027 Notes to pay the cost of the capped call transactions. The capped call transactions are expected generally to reduce the potential dilutive effect upon conversion of the 2027 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a price cap of $48.88 of our common stock per share, which represents a premium of 100% over the last reported sale price of our common stock on February 10, 2020. The capped calls have an initial strike price of $32.38 per share, subject to certain adjustments, which corresponds to the conversion option strike price in the 2027 Notes. The capped call transactions cover, subject to anti-dilution adjustments, approximately 8.9 million shares of our common stock.
Note Purchase Agreement
In March 2022, we entered into the Note Purchase Agreement and issued the First Tranche in an aggregate principal amount for all such Notes of $100 million. OnIn August 8, 2023, the Company, HintMD and Athyriumwe entered into the First Amendment. PursuantAmendment to the First Amendment,reduce the Second Tranche commitment was reduced from $100 million to $50 million, and we subsequently issued $50 million to the Purchasers. Additionally, the First Amendment increased the uncommitted Third Tranche was increased from $100 million to $150 million. On or before August 31, 2023, the Company expects to issue to the purchasers under the Note Purchase Agreement notes in an aggregate principal amount of $50 million, provided certain conditions are met. The uncommitted Third Tranche iswas available until March 31, 2024, subject to the satisfaction of certain conditions set forth in the Note Purchase Agreement,
including the achievement of greater than or equal to $50 million in trailing twelve months revenue for DAXXIFY® preceding the date of the draw request for the Third Tranche, and approval by Athyrium.
Our obligations under the Note Purchase Agreement are secured by substantially all of our assets and the assets of our wholly owned domestic subsidiaries, including their respective intellectual property.
The notes issued pursuant to the First Tranche and to be issued pursuant to the Second Tranche will bear interest at an annual fixed interest rate equal to 8.50%. The First Amendment modified the variable interest rate adjustment for the Third Tranche from Adjusted Three-Month LIBOR to Adjusted Three-Month Term SOFR. If the Third Tranche of Notes Payable becomesbecame committed, the Notes Payable will then bearwould have born interest at an annual rate equal to the sum of (a) 7.0% and (b) Adjusted Three-Month Term SOFR for such interest period (subject to a floor of 1.50% and a cap of 2.50%). We are required to make quarterly interest payments on each Notes Payable commencing on the last business day of the calendar month following the funding date thereof, and continuing until the Maturity Date. Pursuant to the First Amendment, the Company is required to repay Athyrium the outstanding principal amount of the Second Tranche notes in installments on the last business day of each March, June, September and December (commencing in September 2024), in each case, based on the following principal amortization payment schedule: 2.5% in September and December 2024; 5.0% in March and June 2025; 7.5% in September and December 2025; and 10.0% in March and June 2026; followed by repayment of the Second Tranche in full on September 18, 2026. The Maturity Date may be extended to March 18, 2028 if, as of September 18, 2026, less than $90 million principal amount of our existing 2027 Notes remain outstanding and with the consent of the Purchasers. Initially, all principal for each tranche is due and payable on the Maturity Date. If any Third Tranche notes arewere issued, upon the occurrence of an Amortization Trigger (as defined in the Note Purchase Agreement), we arewould have been required to repay the principal of the Third Tranche in equal monthly installments beginning on the last day of the month in which the Amortization Trigger occurred and continuing through the Maturity Date. At our option, we may prepay the outstanding principal balance of all or any portion of the principal amount of the Notes Payable, subject to a prepayment fee equal to (i) a make-whole amount if the prepayment occurs on or prior to the first anniversary of the NPA Effective Date and (ii) 2.0% of the amount prepaid if the prepayment occurs after the first anniversary of the NPA Effective Date but on or prior to the second anniversary of the NPA Effective Date. Upon prepayment or repayment of all or any portion of the principal amount of the Notes Payable (whether on the Maturity Date or otherwise), we are also required to pay an exit fee to the Purchasers.
The Note Purchase Agreement includes affirmative and negative covenants applicable to us, our current subsidiaries and any subsidiaries we create in the future. The affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage and satisfy certain requirements regarding deposit accounts. We must also (i) maintain at least $30.0 million of unrestricted cash and cash equivalents in accounts subject to a control agreement in favor of Athyrium at all times (the Minimum Cash Covenant) and (ii) upon the occurrence of certain specified events set forth in the Note Purchase Agreement, achieve at least $70.0 million of Consolidated Teoxane Distribution Net Product Sales on a trailing twelve-months basis. The negative covenants include, among others, restrictions on our transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and undergoing a change in control, in each case subject to certain exceptions.
If we do not comply with the affirmative and negative covenants, such non-compliance may be an event of default under the Note Purchase Agreement. The Note Purchase Agreement also includes events of default, the occurrence and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 2.0% and would provide Athyrium, as administrative agent, with the right to exercise remedies against us and the collateral, including foreclosure against our property securing the obligations under the Note Purchase Agreement, including our cash. These events of default
include, among other things, our failure to pay principal or interest due under the Note Purchase Agreement, a breach of certain covenants under the Note Purchase Agreement, our insolvency, the occurrence of a circumstance which could have a material adverse effect and the occurrence of any default under certain other indebtedness.
Convertible Senior Notes
Follow-On Offering
In February 2020,March 2024, we completed a follow-on offering, pursuant to which we issued the 2027 Notes, in the aggregate principal amount of $287.516.0 million pursuant to the Indenture. The 2027 Notes are senior unsecured obligations and bear interest at a rate of 1.75% per year, payable semiannually in arrears on February 15 and August 15 of each year, began on August 15, 2020. The 2027 Notes will mature on February 15, 2027, unless earlier converted, redeemed or repurchased. In connection with issuing the 2027 Notes, we received $278.3 million in net proceeds, after deducting the initial purchasers’ discount, commissions, and other issuance costs.
The 2027 Notes may be converted at any time by the holders prior to the close of business on the business day immediately preceding November 15, 2026 only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2020 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the measurement period in which the trading price (as defined in the Indenture) per $1,000 principal amount of the 2027 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (iii) if we call any or all of the 2027 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events. On or after November 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2027 Notes at any time, regardless of the foregoing circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock at our election.
The conversion rate will initially be 30.8804 sharesa price to the public of our common stock per $1,000 principal amount of the 2027 Notes (equivalent to an initial conversion price of approximately $32.38$6.25 per share of our common stock). The conversion rate is subject(except with respect to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2027 Notes in connection with such a corporate event or notice of redemption, as the case may be.
Contractually, we may not redeem the 2027 Notes prior to February 20, 2024. We may redeem for cash all or any portion of the 2027 Notes, at our option, on or after February 20, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the 2027 Notes30,000 shares to be redeemed, plus any accruedsold and unpaid interestissued to but excluding, the redemption date. No sinking fund is provided for the 2027 Notes.
If we undergo a fundamental change (as defined in the Indenture), holders may require us to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2027 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
We used $28.9 million of the net proceeds from the 2027 Notes to pay the cost of the capped call transactions. The capped call transactions are expected generally to reduce the potential dilutive effect upon conversion of the 2027 Notesand/or offset any cash payments we are required to make in excess of the principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a price cap of $48.88 ofMark Foley, our common stock per share, which represents a premium of 100% over the last reported sale price of our common stock on February 10, 2020. The capped calls have an initial strike price of $32.38 per share, subject to certain adjustments, which corresponds to the conversion option strike price
in the 2027 Notes. The capped call transactions cover, subject to anti-dilution adjustments, approximately 8.9president, chief executive officer, and director, at $6.98 per share), for net proceeds of $97.1 million, shares of our common stock. after underwriting discounts and estimated offering costs.
ATM Offering Programs
In November 2020, we entered into the 2020 ATM Agreement. From January 1, 2022 through May 10, 2022, we sold 1.7 million shares of common stock at a weighted average price of $18.71 per share resulting in net proceeds of $31.6 million after sales agent commissions and offering costs. We terminated the 2020 ATM Agreement on May 10, 2022.
On May 10, 2022, we entered into the 2022 ATM Agreement with Cowen. Under the 2022 ATM Agreement, we may sell up to $150.0 million of common stock. For the three months ended June 30, 2023, we sold 3.2 million shares of common stock under the 2022 ATM Agreement at a weighted average price of $31.90 per share, resulting in net proceeds of $100.0 million after sales agent commissions and offering costs. No shares of common stock had beenwere sold under the 2022 ATM Agreement forduring the three months ended March 31, 2023.2024 from the 2022 ATM Agreement.
Common Stock and Common Stock Equivalents
As of July 31, 2023,April 30, 2024, outstanding shares of common stock were 88.0 million, outstanding stock options were 4.3104.4 million, unvested RSUs and PSUs were 3.35.3 million, outstanding stock options were 3.6 million, unvested RSAs and PSAs were 1.60.6 million, shares expected to be purchased on June 30, 2024 under the 2014 ESPP were 0.2 million and shares of common stock underlying the 2027 Notes was 8.9 million, based upon the initial conversion price.
Operating and Capital Expenditure Requirements
We expect to continue to incur GAAP operating losses infor the foreseeable future periods as we continue to devote our resources to the commercialization, research and development, manufacturing development and regulatory approval and/or commercialization of our products and services.products.
Disciplined capital allocation continues to be a priority; however, we expect that we will continue to expend substantial resources for the foreseeable future and in the long-term to support the growth of the aesthetics portfolio in addition to preparing for the Company’s potential entry into therapeutics withof Products and DAXXIFY® for the treatment of cervical dystonia and supportingto support our ongoing operations. In particular, we anticipate our expensesthat we will increase in the near term as we expand our commercial sales team in the United States andcontinue to invest substantial resources in our salescommercialization efforts across aesthetics and marketing strategy;therapeutics and the manufacturing and supply of DAXXIFY® for commercialization; and seek approval of and prepare to commercialize DAXXIFY® for the treatment of cervical dystonia.commercialization. In addition, we expect to continue to make capital outlays in connection with our partnerships and Services business. In connection with the Teoxane Agreement, we must continue to make specified annual minimum purchases of the RHA® Collection of dermal fillers and meet annual minimum investments in connection with the commercialization of the RHA® Collection of dermal fillers. In addition, we have dedicated manufacturing capacity, buyback obligations, cost sharing arrangements and related minimum purchase obligations under our manufacturing and supply agreements in connection with the manufacture and supply of DAXXIFY® and any product candidate. We also anticipate expending resources to continue to support the onabotulinumtoxinA biosimilar and Fosun partnerships. Further, to grow the Services business, we plan to continue to develop OPUL® and other services that meet the needs of our customers. In the long term, in addition to the aforementioned expenditures, we anticipate our expenditures will include clinical programs for DAXXIFY® in other potential indications and international regulatory investments.
As of March 31, 2024, we had capital resources of $277.1 million consisting of cash, cash equivalents, and short-term investments. To date, we have funded our operations primarily through the sale of common stock, convertible senior notes, sales of Products, proceeds from notes issued pursuant to the Note Purchase Agreement and payments received from collaboration arrangements, salesarrangements. We also have remaining capacity to sell up to $47.2 million of our Products and, in March 2022, we received proceeds from the First Tranche. On or before August 31, 2023, the Company expects to issue to the purchaserscommon stock under the Note Purchase2022 ATM Agreement notes in an aggregate principal amountas of $50.0 million, provided certain conditions are met; and, we have an established ATM program.March 31, 2024. We believe that our existing capital resources along with our ability to draw on the Second Tranche, will be sufficient to fund the operating plan through at least the next 12 months following the issuance of this Report.
However, we may need to raise substantial additional financing in the future to fund our operations. In addition, our estimates regarding the amounts necessary to accomplish our business objectives may be inaccurate, other unanticipated costs may arise and our operating plan may change as a result of many factors currently unknown to us, and we may need to seek
additional capital sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe that we have sufficient funds for our current or future operating plans.
Please read Part II,
See “Part 1. Item 1A.
“Risk Factors —WeFactors—We have incurred significant losses since our inception and we anticipate that we will require substantial additional financing to continue to operate our businessincur GAAP operating losses for the foreseeable future and may not achieve our goals,or maintain profitability in the future” in our FY2022FY2023 Form 10-K for additional information.
Critical Accounting Policies and Estimates
For the sixthree months ended June 30, 2023,March 31, 2024, there have been no material changes in our critical accounting policies compared to those disclosed in Item 7 in our FY2022FY2023 Form 10-K.
Contractual Obligations
There were no material changes outside of the ordinary course of business in our contractual obligations as of June 30, 2023,March 31, 2024, from those as of December 31, 20222023 as reported in our FY2022FY2023 Form 10-K.
Recent Accounting Pronouncements
Refer to “Recent Accounting Pronouncements” in Part I, Item 1, “Financial Information—Notes to Condensed Consolidated Financial Statements (Unaudited)—Note 1—The Company and Summary of Significant Accounting Policies” in this Report. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates. We do not hold or issue financial instruments for trading purposes. For the sixthree months ended June 30, 2023,March 31, 2024, our exposure to market risk did not change materially from what was disclosed in Item 7A in our FY2022FY2023 Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Report, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
For the three months ended June 30, 2023,March 31, 2024, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are currently involved in litigation relating to claims arising out of our operations and may be involved in such litigation in the future. Such matters are subject to uncertainty and there can be no assurance that such legal proceedings will not have a material adverse effect on our business, results of operations, financial position or cash flows.
In October 2021, Allergan filed a complaint against us and ABPS, one of our manufacturing sources of DAXXIFY®, in the U.S. District Court for the District of Delaware, alleging infringement of the following patents assigned and/or licensed to Allergan: U.S. Patent Nos. 11,033,625; 7,354,740; 8,409,828; 11,124,786; and 7,332,567. Allergan claims that our formulation for DAXXIFY® and ABPS’s manufacturing process used to produce DAXXIFY® infringes its patents. Allergan also asserted a patent with claims related to a substrate for use in a botulinum toxin detection assay. On November 3, 2021, we filed a motion to dismiss. On November 24, 2021, Allergan filed an amended complaint against us and ABPS, alleging infringement of an additional patent assigned and/or licensed to Allergan: U.S. Patent No. 11,147,878. On December 17, 2021, we filed a second motion to dismiss, and on January 14, 2022, Allergan filed an opposition to that motion. We filed a reply to Allergan’s opposition on January 21, 2022, and on August 19, 2022, the court denied our second motion to dismiss. On September 2, 2022, we filed an answer and counterclaims to Allergan’sAllergan's amended complaint. On December 30, 2022, Allergan filed a second amended complaint against us and ABPS, alleging infringement of three additional patents assigned and/or licensed to Allergan: U.S. Patent Nos. 11,203,748; 11,326,155; and 11,285,216. On January 20, 2023, we filed an answer and counterclaims to Allergan's second amended complaint. On March 3, 2023, we filed invalidity contentions, which challenge Allergan’s asserted patents. A Markman hearing was held on June 28, 2023, and we awaita decision was issued on August 29, 2023. On September 15, 2023, U.S. Patent No. 7,332,567 was dismissed from the court’s decision on claim construction.case with prejudice.
On December 10, 2021, a putative securities class action complaint was filed against the Company and certain of its officers on behalf of a class of stockholders who acquired the Company’s securities from November 25, 2019 to October 11, 2021, in the U.S. District Court for the Northern District of California. The complaint alleges that the Company and certain of its officers violated Sections 10(b) and 20(a) of Exchange Act by making false and misleading statements regarding the manufacturing of DAXXIFY® and the timing and likelihood of regulatory approval and seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. The court appointed the lead plaintiff and lead counsel on September 7, 2022. The lead plaintiff filed an amended complaint on November 7, 2022. On January 23, 2023, we filed a motion to dismiss.dismiss, and on March 30, 2024, the Court granted the motion with leave for the plaintiff to amend the complaint. On March 8, 2023,May 1, 2024, the lead plaintiff filed an oppositionamended complaint, which asserted similar claims to our motion to dismiss. On April 7, 2023, we filed a replythose in support of our motion to dismiss. A hearing on our motion to dismiss is scheduled for August 10, 2023, but we cannot be certain of whether that motion to dismiss will be granted.the prior complaint.
We dispute the claims in these lawsuits and intend to defend these matters vigorously. These lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcomes of the lawsuits are necessarily uncertain. We could be forced to expend significant resources in the defense of either lawsuit, and we may not prevail. In addition, we may incur substantial legal fees and costs in connection with each lawsuit.
ITEM 1A. RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully read and consider the risks we describe in Part I, Item IA1A of our FY2022FY2023 Form 10-K, and Quarterly Report on Form 10-Q for the period ended March 31, 2023, as well as all other information included in this Report, including our condensed consolidated financial statements, the notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before you decide to purchase shares of our common stock. If any of the followingthose risks actually occurs, our business, prospects, financial condition and operating results could be materially harmed. As a result, the trading price of our common stock could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and stock price.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
Rule 10b5-1 Trading Arrangements
The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our Section 16 officers and directors for the three months ended June 30, 2023, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Title | | Action | | Date | | Total Shares to be Sold | | Expiration Date |
| | | |
Dwight Moxie,
Senior Vice President, General Counsel and Corporate Secretary
| | Adopt | | 6/5/2023 | | 34,853 | | 12/5/2023 |
During the three months ended June 30, 2023,March 31, 2024, none of our Section 16 officers or directors adopted, modified or terminated a Rule 10b5-1 trading planarrangement or adopted or terminated a non-Rule 10b5-1 trading arrangement.arrangement, as defined in Item 408 of Regulation S-K.
First Amendment to Note Purchase Agreement
On August 8, 2023, the Company, HintMD and Athyrium entered into the First Amendment (the “First Amendment”) to the existing Note Purchase Agreement dated March 18, 2022, previously filed with the Securities and Exchange Commission as Exhibit 10.4 to a Quarterly Report on From 10-Q for the period ended March 31, 2022. Pursuant to the First Amendment, the Second Tranche commitment was reduced from $100.0 million to $50.0 million, and the uncommitted Third Tranche was increased from $100.0 million to $150.0 million. On or before August 31, 2023, the Company expects to issue to the purchasers under the Note Purchase Agreement notes in an aggregate principal amount of $50.0 million, provided certain conditions are met. The notes to be issued pursuant to the Second Tranche will bear interest at an annual fixed interest rate equal to 8.50%.
The First Amendment eliminated the applicability of the Amortization Trigger to the amortization of the Second Tranche and provided for a principal amortization payment schedule for the Second Tranche. Pursuant to the First Amendment, the Company is required to repay Athyrium the outstanding principal amount of the Second Tranche notes in installments on the last business day of each March, June, September and December (commencing in September 2024), in each case, based on the following principal amortization payment schedule: 2.5% in September and December 2024; 5.0% in March and June 2025; 7.5% in September and December 2025; and 10.0% in March and June 2026; followed by repayment of the Second Tranche in full on September 18, 2026. See “—Liquidity and Capital Resources—First Amendment to Note Purchase Agreement” for additional information. Except as explicitly amended, all of the terms and conditions of the Note Purchase Agreement remain in full force and effect. The foregoing description of the First Amendment is only a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of such amendment, which will be filed as an exhibit to the Quarterly Report on Form 10-Q for the quarterly period ending September 30, 2023.
ITEM 6. EXHIBITS
The following exhibits are included herein or incorporated herein by reference: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Incorporated by Reference | | |
| Exhibit Number | | Exhibit Description | | Form | | File No. | | Exhibit | | Filling Date | | Filed Herewith |
| 3.1 | | | | 8-K | | 001-36297 | | 3.1 | | February 11, 2014 | | — |
| 3.2 | | | | 8-K | | 001-36297 | | 3.1 | | May 7, 2021 | | — |
| 3.3 | | | | 8-K | | 001-36297 | | 3.1 | | December 22, 2021 | | — |
| 4.1 | | | | S-1/A | | 333-193154 | | 4.4 | | February 3, 2014 | | — |
| 4.2 | | | | 8-K | | 001-36297 | | 4.1 | | February 14, 2020 | | — |
| 4.3 | | | | 8-K | | 001-36297 | | 4.2 | | February 14, 2020 | | — |
| 31.1 | | | | — | | — | | — | | — | | X |
| 31.2 | | | | — | | — | | — | | — | | X |
| 32.1† | | | | — | | — | | — | | — | | X |
| 32.2† | | | | — | | — | | — | | — | | X |
| 101.INS | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | | — | | — | | — | | — | | X |
| 101.SCH | | Inline XBRL Taxonomy Extension Schema Document | | — | | — | | — | | — | | X |
| 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | — | | — | | — | | — | | X |
| 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document | | — | | — | | — | | — | | X |
| 101.LAB | | Inline XBRL Taxonomy Extension Labels Linkbase Document | | — | | — | | — | | — | | X |
| 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | — | | — | | — | | — | | X |
| 104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101) | | — | | — | | — | | — | | X |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Incorporated by Reference | | |
| Exhibit Number | | Exhibit Description | | Form | | File No. | | Exhibit | | Filling Date | | Filed Herewith |
| 3.1 | | | | 8-K | | 001-36297 | | 3.1 | | February 11, 2014 | | — |
| 3.2 | | | | 8-K | | 001-36297 | | 3.1 | | May 7, 2021 | | — |
| 3.3 | | | | 8-K | | 001-36297 | | 3.1 | | December 15, 2023 | | — |
| 4.1 | | | | S-1/A | | 333-193154 | | 4.4 | | February 3, 2014 | | — |
| 4.2 | | | | 8-K | | 001-36297 | | 4.1 | | February 14, 2020 | | — |
| 4.3 | | | | 8-K | | 001-36297 | | 4.2 | | February 14, 2020 | | — |
| 10.1+ | | | | 8-K | | 001-36297 | | 10.1 | | February 28, 2024 | | — |
| 10.2* | | | | 8-K | | 001-36297 | | 10.2 | | February 28, 2024 | | — |
| 10.3* | | | | — | | — | | — | | — | | X |
| 10.4* | | | | — | | — | | — | | — | | X |
| 10.5* | | | | 8-K | | 001-36297 | | 10.1 | | February 13, 2024 | | — |
| 10.6* | | | | — | | — | | — | | — | | X |
| 31.1 | | | | — | | — | | — | | — | | X |
| 31.2 | | | | — | | — | | — | | — | | X |
| 32.1† | | | | — | | — | | — | | — | | X |
| 32.2† | | | | — | | — | | — | | — | | X |
| 101.INS | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | | — | | — | | — | | — | | X |
| 101.SCH | | Inline XBRL Taxonomy Extension Schema Document | | — | | — | | — | | — | | X |
| 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | — | | — | | — | | — | | X |
| 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document | | — | | — | | — | | — | | X |
| 101.LAB | | Inline XBRL Taxonomy Extension Labels Linkbase Document | | — | | — | | — | | — | | X |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Incorporated by Reference | | |
| Exhibit Number | | Exhibit Description | | Form | | File No. | | Exhibit | | Filling Date | | Filed Herewith |
| 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | — | | — | | — | | — | | X |
| 104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101) | | — | | — | | — | | — | | X |
† The certifications attached as Exhibit 32.1 and 32.2 that accompany this Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, and shall not be deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Exchange Act. Such certifications shall not be deemed incorporated by reference into any filing of Revance Therapeutics, Inc. under the Securities Act, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
+ Portions of this exhibit (indicated by asterisks) have been omitted as the registrant has determined that (i) the omitted information is not material and (ii) the omitted information would likely cause competitive harm to the registrant if publicly disclosed.
* Indicates a management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | | | | |
| | | |
| REVANCE THERAPEUTICS, INC. |
| | |
Date: August 8, 2023May 9, 2024 | By: | | /s/ Mark J. Foley |
| | | Mark J. Foley |
| | | President and Chief Executive Officer |
| | | (Duly Authorized Principal Executive Officer) |
| | | |
| By: | | /s/ Tobin C. Schilke |
| | | Tobin C. Schilke |
| | | Chief Financial Officer |
| | | (Duly Authorized Principal Financial Officer and Principal Accounting Officer) |