Shares of Revance Therapeutics (NASDAQ:RVNC) are under pressure after management announced the pricing of a secondary offering. Investors dismayed by the pricing of the offering have hammered the biotech stock 16.4% lower as of 12:07 p.m. EST on Wednesday.
Revance shares had been climbing since the company submitted an application to the FDA for DAXI late last month. On Monday, shares of Revance peaked above $20 per share and stayed there through the end of Tuesday's session, which is why investors were surprised at the $17 per share offering price announced today.
DAXI is a longer-lasting version of the world's favorite neurotoxin, Botox, and Revance has evidence to prove it works better. That means Revance could end up competing with AbbVie (NYSE:ABBV) for a slice of Botox sales, which have risen to around $2.7 billion annually.
Within a couple of months, we'll know if the FDA will begin a review of DAXI that will probably last 10 months. Revance's collaboration partner, Mylan (NASDAQ:MYL), passed on the chance to fund late-stage development of DAXI in August and has until April 30, 2020, to change its mind.
If Mylan agrees to launch DAXI and give Revance a mid-double-digit royalty percentage on future sales, it could get much harder for AbbVie's acquisition of Allergan to deliver a positive return.