Nashville-based company Revance had high hopes for its new cosmetic dermal filler, Daxxify, which boasted a longevity twice that of AbbVie’s Botox. They aimed to capture the “prestige market,” despite pricing it at a premium. However, since its approval a year ago, Daxxify struggled to make a significant impact in the anti-wrinkle market.
In a recent Investor Day presentation, Revance unveiled a new strategy for Daxxify: a significant price reduction. This strategic move was designed to “accelerate market expansion” and boost sales of their flagship product. Surprisingly, this announcement did not resonate well with investors, leading to a 20% drop in Revance’s share price.
“This will help management’s messaging around properly setting expectations for Daxxify’s differentiated duration, given it no longer carries a premium price. We anticipate the launch of Daxxify will ramp up quickly as customers and physicians embrace the product’s differentiated profile and competitive pricing.”
– William Blair analyst Tim Lugo
Revance’s rationale for the price adjustment is multi-faceted. They anticipate that the competitive price point will facilitate physicians in recommending a shift to Daxxify, while also encouraging more patients to give it a try. Additionally, with fewer injections required for Daxxify, patients can expect to save money in the long run.
The price reduction was implemented at the beginning of the current month, and early results have been promising. In the first week of September, Revance observed a remarkable 50% increase in the number of accounts ordering Daxxify compared to the first week of June.
Despite the price drop, Revance remains optimistic about its revenue prospects for the third quarter, with hopes of matching the second quarter’s product revenue of $23 million. Furthermore, the company is gearing up to introduce Daxxify for the treatment of cervical dystonia, a condition characterized by involuntary neck muscle contractions leading to the twisting of the head to one side. The FDA recently granted approval for this new indication. With the cervical dystonia market projected to grow rapidly, reaching $8 billion by 2025 according to William Blair, analysts believe that Revance is well-positioned to capitalize on this significant opportunity.
