Crown Laboratories to Acquire Revance Therapeutics for $924 Million at 111% Premium

On August 12, Crown Laboratories announced that it would acquire the aesthetic medicine niche leader Revance Therapeutics (NASDAQ: RVNC) for $924 million in cash. The acquisition price is $6.66 per share, representing an 89% premium over Revance’s closing price on August 9, 2024, and a 111% premium over its 60-day volume-weighted average price (VWAP). The stock closed up 86% at $6.58.

The transaction is expected to be completed by the end of the year. Upon completion of the merger, Revance will be wholly owned by Crown, and Revance’s stock will no longer be publicly traded on Nasdaq.

This transaction represents a powerful consolidation in the medical aesthetics sector. Through this merger, Revance and Crown will jointly establish one of the most extensive and robust distribution networks in the skincare industry, further solidifying and expanding their market presence while delivering more comprehensive and efficient skincare solutions to consumers worldwide.

Jeff Bedard, Founder and CEO of Crown Laboratories, stated, “This represents a significant step forward in our vision to establish Crown as a fully integrated global aesthetics and skincare company, delivering innovative solutions to physicians, patients, and consumers in the dynamic aesthetics and skincare market. Revance has an impressive track record in developing innovative aesthetic products that will complement Crown’s innovative skincare portfolio. As a combined company, we have the opportunity to create a comprehensive, high-growth product portfolio for every stage of life, and we remain committed to investing in education, training, and practice support for aesthetic providers across the United States.”

Mark J. Foley, President and Chief Executive Officer of Revance, stated: “Over the past few years, Revance has launched innovative aesthetic and therapeutic products to the market, enhancing the experience for both patients and physicians. We are excited about this transaction and our partnership with Crown Laboratories, which will enable us to expand our supplier network and broaden our product portfolio. We also believe that the merger delivers significant value to our shareholders. Crown shares our commitment to innovation and scale, and will help us accelerate growth. Scale and product breadth are critical factors in the markets where we compete. Through our combination with Crown, we will be able to offer more compelling products and services to our customers, while benefiting from the combined strength of our collective commercial organization.”

Revance is an emerging biotechnology company, with its core assets including DAXXIFY, an innovative long-acting botulinum toxin injectable.^®(DaxibotulinumtoxinA-lanm), the product has attracted widespread attention from the industry since its market launch.

Botulinum toxin, commonly known as Botox, is a bacterial exotoxin produced by *Clostridium botulinum*. It exhibits potent neuromuscular blocking activity. Its mechanism of action involves binding to specific receptors on the presynaptic membrane of nerve terminals, thereby interfering with the fusion of synaptic vesicles with the presynaptic membrane and inhibiting the release of neurotransmitters such as acetylcholine. This results in chemically induced denervation effects, including muscle relaxation and impaired glandular secretion.

For a long time, Allergan’s Botox has dominated the anti-wrinkle and body-contouring sectors of the medical aesthetics industry. Approved by the U.S. FDA in 2002, this botulinum toxin product is renowned as the “King of Botulinum Toxin” in the United States for its superior efficacy in wrinkle reduction and facial slimming.

Revance, the Rising Star in Botulinum Toxin, Is Ambitious: As the Fifth Approved Botulinum Toxin Product in the U.S., DAXXIFY Challenged Botox Upon Its Market Launch.

DAXXIFY is an acetylcholine release inhibitor and neuromuscular blocking agent indicated for the temporary improvement of moderate to severe glabellar lines associated with corrugator and/or procerus muscle activity in adult patients. The product received FDA approval in September 2022 for the temporary improvement of moderate to severe glabellar lines in adults.

DAXXIFY is the first and currently only neuromodulator stabilized using Revance’s proprietary Peptide Exchange Technology™ (PXT), free from human serum albumin and animal-derived components.

Phase 3 clinical trials demonstrated that the median duration of effect for DAXXIFY was up to 6 months, with effects lasting as long as 9 months in some patients. For both consumers and injectors using neuromodulators, the duration of efficacy remains one of the most significant unmet needs in botulinum toxin products. DAXXIFY requires only two injections per year to maintain year-round results, whereas traditional neuromodulators typically require injections every 3–4 months. Furthermore, DAXXIFY does not require cold-chain storage, offering consumers a more convenient and longer-lasting aesthetic medicine option.

Compared with Allergan’s Botox (which had global net revenues of $2.232 billion in 2021), which typically takes about 7 days to take effect and lasts for approximately 4–6 months, DAXXIFY offers a core advantage of an average duration of 6 months (up to 9 months) and visible results in as little as 1 day, undoubtedly making it more attractive to users.

DAXXIFY’s innovative, unique mechanism and cost advantages have also driven its impressive market performance. In 2023, DAXXIFY achieved full-year sales of $84.01 million, equivalent to RMB 600 million. Particularly noteworthy was its fourth-quarter sales performance: in Q4 2023, DAXXIFY recorded sales of $58.5 million, representing a 22% quarter-on-quarter growth, demonstrating strong momentum.

According to DRG data, the global market size for botulinum toxin was approximately $8.1 billion in 2023, meaning DAXXIFY’s market share represents only the tip of the iceberg. However, its fourth-quarter financial report indicates a high repurchase rate, with roughly three-quarters of its revenue in that quarter coming from repeat-order accounts.

This not only demonstrates that DAXXIFY has won consumer favor in terms of efficacy, pricing, and user experience, but also signals its potential to become a market leader. In the long term, this stable customer base and brand loyalty will serve as the foundation for Revance’s sustainable growth.

Meanwhile, DAXXIFY has not only demonstrated its competitiveness in the aesthetic sector but also secured FDA approval for medical use in treating cervical dystonia in adults, a condition affecting approximately 60,000 Americans. Revance projects that the total addressable market for DAXXIFY in the United States will reach $2.5 billion, with $345 million specifically attributed to the treatment of cervical dystonia.

It is worth noting that in December 2018, Fosun Pharma Industry, a subsidiary of Fosun Pharma, entered into a collaboration and license agreement with Revance, obtaining exclusive rights to use, import, sell, and otherwise commercialize (excluding manufacturing) RT002 (DAXXIFY®, daxibotulinumtoxinA-lanm) in mainland China, Hong Kong, and Macau. Under the agreement, Fosun Pharma Industry is obligated to pay Revance up to $88 million in licensing fees and up to $172.5 million in sales milestone payments. As of February 2023, Fosun Pharma had cumulatively invested over RMB 300 million in the research and development of RT002.

In April 2023, the National Medical Products Administration (NMPA) accepted for review the drug registration application for RT002 for the temporary improvement of moderate to severe glabellar lines in adults caused by corrugator and/or procerus muscle activity, marking a significant step toward its market launch.

Therefore, the partnership between Revance and Crown Laboratories will not only further expand Revance’s global footprint but also inject new momentum into Fosun Pharma’s long-term development in the medical aesthetics market.

Due to their unique characteristics, botulinum toxin products face extremely high market entry barriers, typically requiring more than six years from application to final commercial launch, thereby ensuring a favorable market landscape.

Currently, botulinum toxin products are highly popular in China’s medical aesthetics industry. Public data shows that in 2022, botulinum toxin injections ranked first among non-surgical medical aesthetic procedures in terms of consumer spending. With the continuous growth in the number of individuals seeking aesthetic treatments in China, along with rising consumer purchasing power and willingness to spend, sales of botulinum toxin products in mainland China are expected to experience explosive growth over the next five years. Sales revenue is projected to reach RMB 12.5 billion by 2025, positioning China as one of the world’s three largest markets, on par with the United States and the European Union.

In China, in addition to Fosun Pharma, numerous domestic manufacturers such as Imeik, Huadong Medicine, CMS Pharmaceuticals, and Haohai Biological Technology are actively positioning themselves in the botulinum toxin sector. As a popular segment within the medical aesthetics industry, China’s botulinum toxin market currently remains characterized by a “four-way split.” The only four botulinum toxin products approved for marketing in China are the domestically produced Hengli (Lanzhou Biological), the U.S.-made Botox (Allergan), the UK-originated Dysport (Ipsen), and the South Korean product Letybo (Hugel).

However, in the next 3 to 5 years, China will see the launch of multiple botulinum toxin products, including those from Imeik, Fosun Pharma, and Huadong Medicine’s distributed “Orange Toxin,” RT002, and “Blue Toxin.” The industry landscape may undergo further transformation, with intensifying competition. Against the backdrop of frequent entries by listed companies, the previously dominant four-player competitive structure in China’s domestic botulinum toxin market is likely to change.

RT002, introduced by Fosun Pharma, is not only a therapeutic agent for moderate to severe glabellar lines but also the world’s first long-acting neuromodulator. Its effects last significantly longer than those of existing botulinum toxin products on the market, enduring for 6 to 9 months. In addition to its pronounced long-lasting efficacy, RT002 offers enhanced safety and the convenience of refrigeration-free storage. These advantages have earned it widespread recognition and favor in the international market.

According to market analysis forecasts, once RT002 is launched in the Chinese market, it will adopt a premium positioning strategy and is expected to become a strong competitor to existing products such as Botox.