NASHVILLE, TN - Revance Therapeutics, Inc. (NASDAQ:RVNC), a biotechnology firm specializing in pharmaceutical preparations, announced on Friday an extension to the commencement date of a tender offer related to its planned merger with Crown Laboratories, Inc. and Reba Merger Sub, Inc. (collectively the "Buyer Parties"). The decision to delay the offer, initially set for October 18, 2024, comes as Revance engages in discussions with Teoxane SA concerning an existing distribution agreement.
The ongoing negotiations with Teoxane, a key partner for Revance, stem from a notice Revance received on August 16, 2024, alleging material breaches in their exclusive distribution agreement from January 10, 2020. The alleged breaches pertain to stock levels and efforts to promote and sell Teoxane products. Revance has denied these allegations and is actively disputing the claims, asserting that the issues raised do not constitute material breaches of the agreement. The company has expressed its intention to defend its position vigorously.
Despite the dispute, the distribution agreement remains effective, and discussions with Teoxane could potentially result in modifications to the agreement, including changes to minimum purchase obligations. These discussions are also impacting the timeline of Revance's merger process with the Buyer Parties. As a result, all parties involved agreed to push back the tender offer's start to no later than October 25, 2024, with the possibility of further delays or modifications depending on the outcome of the talks with Teoxane.
The delay in the tender offer could have various implications for the merger, which was initially announced on August 11, 2024, under the Merger Agreement. The company has stated that the merger agreement is still in place, and a waiver related to the extension has been filed with the SEC.
In other recent news, Revance Therapeutics has been amidst significant developments. The company reported a 20% year-over-year increase in its total net revenue, reaching $65.4 million, largely due to a 65% increase in units sold and a 27% rise in net product revenue in its aesthetics division. Additionally, Revance's product, DaxinbotulinumtoxinA for Injection, has received approval from China's National Medical Products Administration, marking a significant expansion into the Chinese market.
Revance is also in the process of merging with Crown Laboratories, a private global skincare company, in a deal valued at approximately $924 million. This proposed merger has led to downgrades of Revance's stock rating by financial services firms William Blair and Stifel to Market Perform and Hold, respectively. Despite these downgrades, Mizuho maintains a Neutral rating on Revance shares, viewing the delay in the tender offer as a delay rather than an indication of the deal falling through.
Simultaneously, Revance is engaged in a dispute with Teoxane, a Swiss-based aesthetic products company, over alleged material breaches under their distribution agreement. This has led to an extension of the commencement date of a planned tender offer. The outcome of the discussions could include modifications to the distribution agreement or further legal remedies sought by either party. These recent developments demonstrate the dynamic nature of Revance Therapeutics' business landscape.
InvestingPro Insights
Revance Therapeutics' current financial situation adds context to its ongoing negotiations and merger plans. According to InvestingPro data, the company's market capitalization stands at $542.98 million, with a revenue of $251.18 million for the last twelve months as of Q2 2024. Notably, Revance has shown strong revenue growth of 40.23% over the same period.
InvestingPro Tips highlight that Revance is quickly burning through cash and is not profitable over the last twelve months. This financial pressure may explain the company's pursuit of a merger and its careful approach to negotiations with Teoxane. On a positive note, Revance's liquid assets exceed its short-term obligations, potentially providing some flexibility during these discussions.
The company's stock has shown a strong return over the last three months, with a 41.92% price total return. This recent performance might reflect investor optimism about the potential merger outcomes and Revance's future prospects.
For readers interested in a deeper analysis, InvestingPro offers 7 additional tips for Revance Therapeutics, providing further insights into the company's financial health and market position.
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