With a new cosmetic dermal filler that works twice as long as AbbVie’s Botox, Nashville, Tennessee, company Revance thought it could capture what it termed the “prestige market.” That, of course, came with a premium price for its botulinum toxin treatment.
But, since its approval a year ago, Revance’s Daxxify has struggled to challenge the anti-wrinkle powerhouse.
Tuesday in an Investor Day presentation, Revance rolled out a new strategy for its lone commercial product, revealing a drop in price that the company expects will “accelerate market expansion” as it attempts to increase sales of Daxxify.
Investors weren’t impressed with the move, as Revance’s share price tumbled by 20% on Tuesday.
Analysts at William Blair, however, favored the strategy, amplifying the words of a key opinion leader who told Revance that the reduced price removes Daxxify’s “lone roadblock to wider adoption.”
“(This) will help management’s messaging around properly setting expectations for Daxxify’s differentiated duration, given it no longer carries a premium price," William Blair analyst Tim Lugo wrote in a note to clients.
Revance believes the competitive price will make it easier for physicians to recommend a shift to Daxxify and for patients to give it a try. The company sees another selling point: With fewer injections needed for Daxxify, patients will be able to save money.
The company made the price change on the first day of this month and has already seen encouraging results. In the first week of September, Revance noticed a 50% increase in the number of accounts ordering Daxxify compared to the first week of June.
As a result—and despite the price drop—Revance believes (PDF) that third-quarter product revenue has a chance to match that of the second quarter. From April through June, the drug pulled in $23 million.
Revance also said it expects to launch Daxxify to treat cervical dystonia, a condition in which neck muscles contract involuntarily and causes the head to twist to one side. The FDA approved the drug for the indication last month.
In a market that is growing rapidly—from $5 billion at present to $8 billion in 2025, according to William Blair—the analysts believe Revance has a major opportunity to cash in.
"We anticipate the launch of Daxxify will ramp up quickly as customers and physicians embrace the product’s differentiated profile and competitive pricing," Lugo wrote.