Biotech stock Revance Therapeutics tumbled after its earnings report Tuesday after the close, and is the IBD 50 Stocks To Watch pick.
Revance Therapeutics is a biotech company specializing in advanced aesthetics and therapeutic treatments. In other words, it removes wrinkles and performs other types of cosmetic treatments.
FDA Approves Frown Line Treatment
Its Daxxify treatment is an FDA-approved injection that impacts the way the nerves work to achieve temporary wrinkle smoothing.
The injectable treatment won approval on Sept. 8 for its use in severe frown lines. The stock popped more than 21% on the news.
The treatment lasts for a median duration of six months and up to nine months for some patients, whereas rival wrinkle injection Botox averages three to four months.
Daxxify also needs fewer injections than Botox, adding to the product's appeal.
The FDA accepted a supplemental application on Jan. 6 for Daxxify to be used for a neck muscle contraction disorder.
The Nashville-based company also sells a series of facial fillers to smooth wrinkles, known as resilient hyaluronic acid fillers, or RHAs.
On the financial side, Revance's OPUL cloud-based payment platform manages customer relationships, and aids business operations for aesthetic practices.
This IBD Top 10 stock holds the No. 31 spot out of 792 stocks in the biotech group. The group ranks 15th out of the 197 IBD industry groups.
Botox Rival Pulled Back After Loss Numbers
Shares fell over 9% Wednesday morning in heavy volume after the company posted a larger-than-expected Q1 loss. RVNC stock fell through the 5% buy zone of a base, setting off the 7% sell rule.
Shares plunged below the 21-day line and found support at the 50-day moving average, before reclaiming the 21-day line.
The newest base started in February, following a prior cup-with-handle base with a 30.70 buy point.
Biotech Stock Sales Expected To Explode
The company posted a loss of 74 cents per share vs. FactSet's estimated 67-cent loss. Analysts expect declining quarterly losses though 2024.
Revenue of $49.3 million grew 95% over last year, but that didn't help the stock, as investors focused on the larger-than-expected loss.
Mutual funds own 74% of shares, while management holds 5%, showing a vested interest in the company's success.
More than 360 funds owned the biotech stock in March, up from 356 in December and 323 in September, according to MarketSmith.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
