Revance's Lead Candidate Fails In Phase III Crow's Feet Study

Revance Therapeutics, Inc. (NASDAQ:RVNC) reported disappointing news that its lead pipeline candidate, daxibotulinumtoxinA topical gel (RT001), failed to meet the co-primary and other endpoints in a phase III study (REALISE 1). We expect investors to react negatively to the news.

The randomized, double-blind, parallel-group, placebo-controlled study was conducted to evaluate the safety and efficacy of the candidate for the treatment of patients suffering from moderate-to-severe lateral canthal lines, popularly known as crow's feet.

Based on unfavorable study results, Revance has decided to discontinue the development of the candidate for the treatment of crow's feet. Also, the company plans to stop the development of RT001 for the treatment of axillary hyperhidrosis.

Meanwhile, Revance intends to focus its efforts and financial resources on the development of an injectable formulation of daxibotulinumtoxinA (RT002), based on positive six-month phase II active comparator study (BELMONT) results for the treatment of glabellar (frown) lines that were presented in Mar 2016. The company intends to initiate a phase III program on RT002 injectable for this indication in the second half of 2016.

In addition, enrollment is currently underway in cohort 2 of a phase II dose-escalating study on RT002 injectable for the treatment of cervical dystonia. The company expects interim data from this study in the second half of 2016.

Revance noted in its press release that it now anticipates its cash and investments to fund its operations into the second quarter of 2018. The company had cash and investments of $236.6 million at the end of Mar 2016.

We are disappointed with the late-stage pipeline setback pertaining to RT001 topical at Revance. We expect investor focus to remain on the company’s progress with RT002 injectable.

Revance is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Retrophin, Inc. (NASDAQ:RTRX) , Bristol-Myers Squibb Company (NYSE:BMY) and Pfizer Inc. (NYSE:PFE) . All three stocks carry a Zacks Rank #1 (Strong Buy).