AbbVie’s Botox Could Lose Market Share To Revance New Drug After FDA Approval

AbbVie's Botox

AbbVie’s (NYSE:ABBV) Botox

On Thursday, the Food and Drug Administration approved a new competitor to AbbVie’s (NYSE:ABBV) anti-wrinkle injection Botox. Industry observers have said it could be the first alternative to disrupt Botox’s market dominance.

The new drug known as Daxxify is the first approval for Revance Therapeutics (NASDAQ:RVNC), and the news sent the company’s stock higher by 12.3% to $23.31 on Thursday. The company’s shares are up 43% on a year-to-date basis.

On the other hand, shares of AbbVie, which has sold Botox since its $62 billion buyout of Allergan two years ago, were up marginally by 0.4%.

With the FDA approval, the Revance drug is set to grab market share from Botox, which was responsible for 8% of AbbVie’s $56 billion revenue last year, behind only Humira’s $20 billion and blood-cancer treatment’s Imbruvica’s $5.4 billion. 

For more than 20 years, Botox, which AbbVie currently sells, has been the dominant player in the aesthetic-drug market it helped develop and has raked in tens of billions of dollars in revenue and has successfully kept competition at bay.

Botox, which is derived from the poisonous botulinum toxin bacteria, blocks the signals between nerves and muscles, making the muscles relax. The drug was developed by a doctor to treat an eye condition before patients realized that it smoothed their wrinkles.

Botox brought in more than $4.6 billion in sales last year, a $1 billion increase from the previous year, as people working from home due to the pandemic sought to look good on video calls and returned to visiting their aesthetic doctors in person. 

Daxxify was approved by the FDA to temporarily improve moderate to severe frown lines in adults. The drug was shown to have a longer effect duration than rivals, with an average duration of six months. That means the drug has a much better chance of grabbing market share from Botox, where other new players like Evolus (EOLS) Jeuveau have struggled.

A Multi-Billion Dollar Opportunity

Back in April, Ken Cacciatore, an analyst at Cowen, noted that a survey of experts showed that Daxxify’s durability and profile would lead to disruption. According to the experts, at least 30% of patients taking such kinds of injections would opt for Daxxify within the next three years instead of competitors such as Botox. 

While AbbVie reported botox sales of roughly $2.2 billion in 2021, Cacciatore estimates that revenue from Daxxify sales could top $1 billion annually. 

On a different note in May, David Amsellem, an analyst at Piper Sandler, wrote that Daxxify’s US sales of more than $500 million per year were highly realistic. Last year, Revance sales were approximately $77.8 million. Going by FactSet analyst consensus estimates, Revance’s total sales are set to increase to $203.4 million in 2023 and $876.8 million by 2027. 

During an investor call on Thursday morning, Revance CEO Mark Foley said that Daxxify would set the new standard for neuromodulator formulation. He explained that the neuromodulator market had remained relatively the same for over three decades and was ripe for disruption. Although new products had been introduced in the market, they all had similar formulations and profiles, with the average effect lasting between 12 and 16 weeks. 

Revance’s president, Dustin Sjuts, revealed that they would roll out the drug gradually, starting with a preview program for doctors before moving to a mass market commercial launch in 2023.

The Aesthetic Society, a professional organization for plastic surgeons, estimates that as of last year, the global aesthetics market was worth $14.6 billion. The association further revealed that physicians in the US carried out about 4.4 million procedures involving Botox and two rivals in 2020.  

Featured Image-  Megapixl @Ronstik 

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