What happened

After the company announced an exclusive U.S. licensing deal to market multiple fillers used in cosmetic procedures, Revance Therapeutics shares (NASDAQ:RVNC) were up 13.1% at 12:30 p.m. EST on Friday.

So what

Investors were hoping Revance Therapeutics would make the leap from clinical-stage to commercial-stage biotech stock this year pending Food and Drug Administration approval of DAXI, a long-lasting formulation of a neurotoxin designed to compete against Allergan's (NYSE:AGN) Botox.

A toy rocket lifting off the ground.

Image source: Getty Images.

Now, it appears the company could start pocketing commercial sales as soon as the second quarter following the licensing of a platform of hyaluronic-acid dermal fillers developed by Teoxane Laboratories, a private Swiss company. Specifically, Revance secured exclusive rights to market Teoxane's FDA-approved RHA 2, RHA 3, and RHA 4 products in the U.S. It also got rights to RHA 1, a fourth filler currently in clinical trials with data expected in 2021.

In exchange for these licensing rights, Revance will issue 2.5 million shares to Teoxane. Currently, Revance has about 45 million shares outstanding.

Now what

Revance plans to begin marketing its newly licensed products in the second quarter. They may help offset operating expenses, while also allowing the company to establish relationships with doctors ahead of the FDA's decision on DAXI. 

Hyaluronic acids account for 88% of the $1.1 billion-per-year dermal filler market, so there's an opportunity for this deal to generate meaningful sales. The bigger opportunity, however, remains DAXI. 

Management filed for an FDA approval of DAXI for frown lines late last year after positive results in phase 3 trials. Results from trials evaluating its use in crow's feet and forehead lines are expected by the end of June. Management pegs the cosmetic target market for DAXI at about $2 billion. It's also evaluating DAXI as an alternative to Botox in medical procedures, representing an additional $2.5 billion market opportunity. 

Since the company's addressable market is in the billions of dollars, its $834 million market cap may still undervalue it. But its success depends on a successful launch of its newly licensed products and a DAXI approval, so investors will want to keep a close eye on the company from here. 

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