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Allergan: Botox Biosimilar From Mylan And Revance Sounds Ominous

Mar. 01, 2018 2:38 PM ETAllergan plc (AGN)VTRS, RVNC35 Comments
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  • MYL and RVNC announced a collaboration to create a biosimilar to rival AGN's Botox.
  • RVNC's RT002 has shown promise in clinical trials. RVNC's product expertise and MYL's capital and regulatory expertise could be formidable.
  • It could hurt Botox's long-term growth prospects and cause investors to question AGN's 10x run-rate EBITDA multiple.
  • Sell AGN.

Source: Time Inc.

Mylan (MYL) and Revance Therapeutics (RVNC) announced a global collaboration and license agreement to develop and commercialize a biosimilar for Allergan's (NYSE:AGN) Botox:

Mylan N.V. (NASDAQ: MYL) and Revance Therapeutics, Inc. (RVNC) today announced a global collaboration and license agreement for the development and commercialization of a proposed biosimilar to BOTOX® (onabotulinumtoxinA). BOTOX is the market-leading neuromodulator approved for the treatment of multiple indications and usage in the United States with additional approvals globally ...

"This will be a significant opportunity for Mylan as we add another difficult-to-manufacture product to our pipeline. We have reviewed the work done to date by Revance and we are extremely excited and confident about our ability to bring this important product to market. Bringing an affordable biosimilar version of BOTOX to commercialization will offer patients a safe alternative to this popular and highly effective treatment," commented Mylan President Rajiv Malik.

Revance will receive $25 million upfront and milestones and royalties dependent upon net sales. Revance also will exclusively develop RT002 - its next-generation neuromodulator. A few months ago Revance reported two Phase 3 trials (SAKURA) for RT002 were positive pursuant to moderate-to-severe glabellar lines. If a longer-term safety trial is successful then Revance is expected to launch a Bilogics Licence Application next year. It hopes to launch RT002 in 2020 on approval.

Why The Mylan Revance Collaboration Matters

Clinical trials show that Revance's RT002 can potentially beat Botox in certain areas. For instance, SAKURA 1 and SAKURA demonstrated RT002 could last six months, where Botox loses efficacy around four months. That could mean fewer visits to the doctor for patients using R002 vis-a-vis Botox. In terms of efficacy Revance appears to have a very competitive product. The fact that Mylan wants to partner with the company appears to be a major vote of

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Analyst’s Disclosure: I am/we are short AGN.

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