SEC Filing - Revance Therapeutics, Inc.

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rvnc-20210630


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___

Commission File No. 001-36297



Revance Therapeutics, Inc.
			(Exact name of registrant as specified in its charter)


			Delaware			77-0551645
			(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1222 Demonbreun Street, Suite 2000, Nashville, Tennessee, 37203

(Address, including zip code, of principal executive offices)

(615) 724-7755

(Registrant’s telephone number, including area code)


Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	RVNC	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial statement accounting standards provide pursuance to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

Number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of July 28, 2021: 71,829,718

Table of Contents


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	43

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	96
Item 3.	Defaults Upon Senior Securities	97
Item 4.	Mine Safety Disclosures	97
Item 5.	Other Information	97
Item 6.	Exhibits	98

Signatures		99

“Revance Therapeutics,” the Revance logos and other trademarks or service marks of Revance appearing in this quarterly report on Form 10-Q (this “Report”) are the property of Revance. This Report contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

Unless expressly indicated or the context requires otherwise, the terms “Revance,” “company,” “we,” “us,” and “our,” in this document refer to Revance Therapeutics, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries.

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PART I.FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements (Unaudited)

REVANCE THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	June 30,		December 31,
	2021		2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	167,634	$	333,558
Short-term investments	168,662		102,947
Accounts receivable, net	641		1,829
Inventories	5,065		5,876
Prepaid expenses and other current assets	12,602		5,793
Total current assets	354,604		450,003
Property and equipment, net	21,092		17,499
Goodwill	146,964		146,964
Intangible assets, net	63,655		71,343
Operating lease right of use assets	46,334		29,632
Restricted cash	3,452		3,445
Other non-current assets	4,774		1,334
TOTAL ASSETS	$	640,875	$	720,220
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	8,176	$	12,657
Accruals and other current liabilities	31,405		32,938
Deferred revenue, current	9,862		7,851
Operating lease liabilities, current	5,646		4,437
Derivative liability	3,159		3,081
Total current liabilities	58,248		60,964
Convertible senior notes	280,003		180,526
Deferred revenue, non-current	75,113		77,294
Operating lease liabilities, non-current	41,276		27,146
TOTAL LIABILITIES	454,640		345,930
Commitments and Contingencies (Note 12)
STOCKHOLDERS’ EQUITY
Convertible preferred stock, par value $0.001 per share — 5,000,000 shares authorized, and no shares issued and outstanding as of June 30, 2021 and December 31, 2020	—		—
Common stock, par value $0.001 per share — 190,000,000 and 95,000,000 shares authorized as of June 30, 2021 and December 31, 2020, respectively; 71,798,624 and 69,178,666 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively	72		69
Additional paid-in capital	1,446,643		1,500,514
Accumulated other comprehensive loss	(2)		—
Accumulated deficit	(1,260,478)		(1,126,293)
TOTAL STOCKHOLDERS’ EQUITY	186,235		374,290
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	640,875	$	720,220

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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REVANCE THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue
Product revenue	$	17,039	$	49	$	28,686	$	49
Collaboration revenue	1,394		250		2,905		308
Service revenue	371		—		512		—
Total revenue	18,804		299		32,103		357
Operating expenses:
Cost of product revenue (exclusive of amortization)	5,409		21		9,626		21
Cost of service revenue (exclusive of amortization)	17		—		17		—
Selling, general and administrative	50,598		29,606		99,603		50,830
Research and development	29,441		27,103		56,692		66,897
Amortization	3,676		674		6,514		674
Total operating expenses	89,141		57,404		172,452		118,422
Loss from operations	(70,337)		(57,105)		(140,349)		(118,065)
Interest income	85		964		182		2,455
Interest expense	(1,569)		(4,256)		(3,129)		(6,404)
Changes in fair value of derivative liability	(19)		(59)		(78)		(149)
Other expense, net	(357)		(134)		(462)		(260)
Loss before income taxes	(72,197)		(60,590)		(143,836)		(122,423)
Income tax provision	—		—		—		(100)
Net loss	(72,197)		(60,590)		(143,836)		(122,523)
Unrealized gain (loss) and adjustment on securities included in net loss	(2)		(407)		(2)		114
Comprehensive loss	$	(72,199)	$	(60,997)	$	(143,838)	$	(122,409)
Basic and diluted net loss	$	(72,197)	$	(60,590)	$	(143,836)	$	(122,523)
Basic and diluted net loss per share	$	(1.07)	$	(1.12)	$	(2.15)	$	(2.27)
Basic and diluted weighted-average number of shares used in computing net loss per share	67,462,413		54,257,320		67,051,902		54,062,678

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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REVANCE THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Convertible Preferred Stock	—	$	—	—	$	—	—	$	—	—	$	—
Common Stock
Balance — Beginning of period	71,411,389	71		57,026,154	57		69,178,666	69		52,374,735	52
Issuance of restricted stock awards and performance stock awards, net of cancellation	166,670	—		220,799	—		1,036,256	1		1,417,853	1
Issuance of common stock in connection with at-the-market offerings	—	—		—	—		761,526	1		—	—
Issuance of common stock upon exercise of stock options and warrants	150,038	1		24,442	—		879,476	1		76,794	—
Issuance of common stock relating to employee stock purchase plan	91,562	—		48,661	—		91,562	—		48,661	—
Shares withheld related to net settlement of restricted stock awards	(21,035)	—		(6,500)	—		(148,862)	—		(79,487)	—
Issuance of common stock in connection with the Teoxane Agreement	—	—		—	—		—	—		2,500,000	3
Issuance of common stock in connection with offerings	—	—		—	—		—	—		975,000	1
Balance — End of period	71,798,624	72		57,313,556	57		71,798,624	72		57,313,556	57
Additional Paid-In Capital
Balance — Beginning of period	—	1,432,457		—	1,213,931		—	1,500,514		—	1,069,639
Cumulative-effect adjustment from adoption of ASU 2020-06	—	—		—	—		—	(108,509)		—	—
Issuance of restricted stock awards and performance stock awards, net of cancellation	—	—		—	—		—	(1)		—	(1)
Issuance of common stock in connection with at-the-market offerings, net of issuance costs	—	(77)		—	—		—	21,623		—	—
Issuance of common stock upon exercise of stock options and warrants	—	1,373		—	427		—	12,509		—	999
Issuance of common stock relating to employee stock purchase plan	—	2,206		—	671		—	2,206		—	671
Shares withheld related to net settlement of restricted stock awards	—	(605)		—	(111)		—	(4,250)		—	(1,512)
Stock-based compensation	—	11,289		—	7,353		—	22,551		—	13,897
Equity component of convertible senior notes	—	—		—	—		—	—		—	108,510
Issuance of common stock in connection with the Teoxane Agreement	—	—		—	—		—	—		—	43,397
Issuance of common stock in connection with offerings, net of issuance costs of $44	—	—		—	—		—	—		—	15,536
Capped call transactions related to the issuance of convertible senior notes	—	—		—	—		—	—		—	(28,865)
Balance — End of period	—	$	1,446,643	—	$	1,222,271	—	$	1,446,643	—	$	1,222,271

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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REVANCE THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity—(Continued)

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Other Accumulated Comprehensive Gain (Loss)
Balance — Beginning of period	—	—		—	524		—	—		—	3
Unrealized gain (loss) and adjustment on securities included in net loss	—	(2)		—	(407)		—	(2)		—	114
Balance — End of period	—	(2)		—	117		—	(2)		—	117
Accumulated Deficit
Balance — Beginning of period	—	(1,188,281)		—	(906,137)		—	(1,126,293)		—	(844,204)
Cumulative-effect adjustment from adoption of ASU 2020-06	—	—		—	—		—	9,651		—	—
Net loss	—	(72,197)		—	(60,590)		—	(143,836)		—	(122,523)
Balance — End of period	—	(1,260,478)		—	(966,727)		—	(1,260,478)		—	(966,727)
Total Stockholders’ Equity	71,798,624	$	186,235	57,313,556	$	255,718	71,798,624	$	186,235	57,313,556	$	255,718

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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REVANCE THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(143,836)	$	(122,523)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	21,975		13,897
Depreciation and amortization	9,284		2,152
Amortization of debt discount and issuance costs	622		4,504
Amortization of discount on investments	(105)		(1,111)
Other non-cash operating activities	62		240
Non-cash in-process research and development	—		11,184
Changes in operating assets and liabilities:
Accounts receivable	1,188		(49)
Inventories	811		(778)
Prepaid expenses and other current assets	(3,309)		(1,179)
Operating lease right of use assets	(16,702)		1,165
Other non-current assets	(3,440)		30
Accounts payable	(4,090)		(1,099)
Accruals and other liabilities	(1,389)		4,052
Deferred revenue	(170)		30,692
Operating lease liabilities	15,339		(1,679)
Net cash used in operating activities	(123,760)		(60,502)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments	(168,597)		(159,412)
Purchases of property and equipment	(5,016)		(1,113)
Proceeds from maturities of investments	103,000		132,000
Finance lease prepayments	(3,500)		—
Purchase of intangible assets	—		(118)
Proceeds from sale of investments	—		16,969
Net cash used in investing activities	(74,113)		(11,674)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock in connection with at-the-market offerings, net of commissions	21,707		—
Proceeds from the exercise of stock options, common stock warrants and employee stock purchase plan	14,715		1,670
Taxes paid related to net settlement of restricted stock awards	(4,250)		(1,512)
Payment of offering costs	(216)		(337)
Proceeds from issuance of convertible senior notes	—		287,500
Proceeds from issuance of common stock in connection with offerings, net of commissions and discount	—		15,581
Payment of capped call transactions	—		(28,865)
Payment of convertible senior notes transaction costs	—		(9,190)
Net cash provided by financing activities	31,956		264,847
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(165,917)		192,671
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	337,003		171,890
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	171,086	$	364,561
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION:
Internally developed software capitalized from stock-based compensation	$	576	$	—
Property and equipment purchases included in accounts payable and accruals	$	501	$	159
Accrued offering costs	$	55	$	—
Issuance of common stock in connection with the Teoxane Agreement	$	—	$	43,400

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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REVANCE THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. The Company and Summary of Significant Accounting Policies

The Company

Revance is a biotechnology company focused on innovative aesthetic and therapeutic offerings, including its next-generation neuromodulator product, DaxibotulinumtoxinA for Injection. DaxibotulinumtoxinA for Injection combines a proprietary stabilizing peptide excipient with a highly purified botulinum toxin that does not contain human or animal-based components. We have successfully completed a Phase 3 program for DaxibotulinumtoxinA for Injection in glabellar (frown) lines and are pursuing United States (“U.S.”) regulatory approval. We are also evaluating DaxibotulinumtoxinA for Injection in the full upper face, including glabellar lines, forehead lines and crow’s feet, as well as in two therapeutic indications - cervical dystonia and adult upper limb spasticity. To accompany DaxibotulinumtoxinA for Injection, we own a unique portfolio of premium products and services for U.S. aesthetics practices, including the exclusive U.S. distribution rights to Teoxane SA (“Teoxane”)’s line of Resilient Hyaluronic Acid® (“RHA®”) Collection of dermal fillers, the first and only range of U.S. Food and Drug Administration (the “FDA”)-approved fillers for correction of dynamic facial wrinkles and folds, and the HintMD fintech platform, which includes integrated smart payment, subscription and loyalty digital services. We have also partnered with Viatris (formerly Mylan N.V.) to develop a biosimilar to BOTOX® (“an onabotulinumtoxinA biosimilar”), which would compete in the existing short-acting neuromodulator marketplace.

On July 23, 2020, we completed the acquisition of all of the issued and outstanding shares of Hint, Inc. (d/b/a HintMD) (the “HintMD Acquisition”), and HintMD became a wholly owned subsidiary of Revance. HintMD operates the HintMD Platform, which is a payment solution and practice management tool for medical aesthetic practices. In April 2021, HintMD completed the integration of the payment facilitator (“PayFac”) functionality and launched the next-generation HintMD Platform (the “Next-generation Platform”, and together with the HintMD Platform, the “Fintech Platform”) in beta form to select customers.

Since inception, we have devoted substantial efforts to identifying and developing product candidates for the aesthetic and therapeutic pharmaceutical markets, recruiting personnel, raising capital, conducting preclinical and clinical development of, and manufacturing development for DaxibotulinumtoxinA for Injection, DaxibotulinumtoxinA Topical, the onabotulinumtoxinA biosimilar, and the commercial launch of our products and services. We have incurred losses and negative cash flows from operations. We have not generated substantial revenue to date, and will continue to incur significant research and development, sales and marketing, and other expenses related to our ongoing operations.

For the three and six months ended June 30, 2021, we had a net loss of $72.2 million and $143.8 million. As of June 30, 2021, we had working capital surplus of $296.4 million and an accumulated deficit of $1.3 billion. In recent years, we have funded our operations primarily through the sale of common stock, convertible senior notes, payments received from collaboration arrangements, and sales of the RHA® Collection of dermal fillers. As of June 30, 2021, we had capital resources of $336.3 million consisting of cash, cash equivalents, and short-term investments. We believe that our existing capital resources will fund our operating plan through at least the next 12 months following the issuance of this Report, and we may identify additional capital resources to fund our operations.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements are unaudited, and reflect all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the interim periods presented.

Our condensed consolidated balance sheet for the year ended December 31, 2020 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting

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REVANCE THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements — (Continued)

(Unaudited)

principles (“U.S. GAAP”). The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2021, or any other future period. Our condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission (the “SEC”), on February 25, 2021.

Our condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries, and have been prepared in conformity with U.S. GAAP. All intercompany transactions have been eliminated.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include, but are not limited to, the fair value of assets and liabilities assumed in business combinations, incremental borrowing rate used to measure operating lease liabilities, the recoverability of goodwill and long-lived assets, useful lives associated with property and equipment and intangible assets, period of benefit associated with deferred costs, revenue recognition (including the timing of satisfaction of performance obligations, estimating variable consideration, estimating stand-alone selling prices of promised goods and services, and allocation of transaction price to performance obligations), deferred revenue classification, accruals including clinical trial costs, valuation and assumptions underlying stock-based compensation and other equity instruments, fair value of derivative liability, and income taxes.

The ongoing COVID-19 pandemic has caused a global slowdown of economic activity which has negatively impacted consumer spending, including with respect to our current and potential customers, while also disrupting sales channels and marketing activities. In addition, the COVID-19 pandemic has impacted the regulatory approval process for DaxibotulinumtoxinA for Injection. In November 2020, the FDA deferred a decision on the biologics license application (“BLA”) for DaxibotulinumtoxinA for Injection for the treatment of moderate to severe glabellar (frown) lines. The FDA reiterated that an inspection of our manufacturing facility is required as part of the BLA approval process, but the FDA was unable to conduct the required inspection of our manufacturing facility in Northern California, due to the FDA’s travel restrictions associated with the COVID-19 pandemic. The FDA initiated the pre-approval inspection of our manufacturing facility in June 2021. We are unable to predict the future impact of the COVID-19 pandemic on the timing of the regulatory approval process following inspection, the progress of clinical trials, supplies and sales of the RHA® Collection of dermal fillers, demand for our products and other aspects of our operations.

As of the date of issuance of these condensed consolidated financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our condensed consolidated financial statements.

Recently Adopted Accounting Pronouncement

In August 2020, the Financial Accounting Standards Board issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 simplifies the accounting for convertible debt instruments by removing certain requirements to separately account for conversion options embedded in debt instruments that are not required to be accounted for as derivative instruments. ASU 2020-06 also updates and improves the consistency of earnings per share calculations for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020, and can be adopted on either a fully retrospective or modified retrospective basis. On January 1, 2021, we adopted ASU 2020-06 using the modified retrospective method and the adoption did not have any impact for our consolidated balance sheets as of December 31, 2020. As a result of the adoption, on January 1, 2021, we made certain adjustments to our consolidated balance

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REVANCE THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements — (Continued)

(Unaudited)

sheets which consisted of an increase of $98.9 million in Convertible Senior Notes (the 2027 Notes as defined in Note 9), a decrease of $108.5 million in Additional Paid-in Capital and a decrease of $9.7 million in Accumulated Deficit. Additionally, from January 1, 2021, we will no longer incur non-cash interest expense for the amortization of debt discount after adoption, therefore the interest expense for the 2027 Notes, which is included in the “interest expense” on the condensed consolidated statements of operations and comprehensive loss, will be lower compared to fiscal year 2020.

2. Revenue

Our revenue is primarily generated from U.S. customers. Our product and collaboration revenue is generated from the Product Segment, and our service revenue is generated from the Service Segment (Note 13). The following tables present our revenues disaggregated by the timing of transfer of goods or services:


	Three Months Ended June 30, 2021								Six Months Ended June 30, 2021
(in thousands)	Product Revenue		Collaboration Revenue		Service Revenue		Total		Product Revenue		Collaboration Revenue		Service Revenue		Total
Timing of revenue recognition:
Transferred at a point in time	$	17,039	$	—	$	213	$	17,252	$	28,686	$	—	$	213	$	28,899
Transferred over time	—		1,394		158		1,552		—		2,905		299		3,204
Total	$	17,039	$	1,394	$	371	$	18,804	$	28,686	$	2,905	$	512	$	32,103


	Three Months Ended June 30, 2020								Six Months Ended June 30, 2020
(in thousands)	Product Revenue		Collaboration Revenue		Service Revenue		Total		Product Revenue		Collaboration Revenue		Service Revenue		Total
Timing of revenue recognition:
Transferred at a point in time	$	49	$	—	$	—	$	49	$	49	$	—	$	—	$	49
Transferred over time	—		250		—		250		—		308		—		308
Total	$	49	$	250	$	—	$	299	$	49	$	308	$	—	$	357

Product Revenue

For the three and six months ended June 30, 2021, all product revenue was generated from the sale of the RHA® Collection of dermal fillers.

Receivables and contract liabilities from contracts with our product revenue customers are as follows:


	June 30,		December 31,
(in thousands)	2021		2020
Accounts receivables, net	$	542	$	1,687
Contract liabilities:
Deferred revenue, current	$	(1,537)	$	—
Total contract liabilities	$	(1,537)	$	—

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REVANCE THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements — (Continued)

(Unaudited)

Collaboration Revenue

Viatris Collaboration and License Agreement

Agreement Terms

We entered into a collaboration and license agreement with Viatris (the “Viatris Collaboration”) in February 2018, pursuant to which we are collaborating with Viatris exclusively, on a world-wide basis (excluding Japan), to develop, manufacture, and commercialize an onabotulinumtoxinA biosimilar.

Viatris has paid us an aggregate of $60 million in non-refundable fees as of June 30, 2021, and the agreement provides for additional remaining contingent payments of up to $70 million in the aggregate, upon the achievement of certain clinical and regulatory milestones and of specified, tiered sales milestones of up to $225 million. The payments do not represent a financing component for the transfer of goods or services.

Revenue Recognition

We re-evaluate the transaction price at each reporting period. We estimated the transaction price for the Viatris Collaboration using the most likely amount method. In order to determine the transaction price, we evaluated all of the payments to be received during the duration of the contract, which included milestones and consideration payable by Viatris. Other than the upfront payment, all other milestones and consideration we may earn under the Viatris Collaboration are subject to uncertainties related to development achievements, Viatris’ rights to terminate the agreement, and estimated effort for cost-sharing payments. Components of such estimated effort for cost-sharing payments include both internal and external costs. Consequently, the transaction price does not include any milestones and considerations that, if included, could result in a probable significant reversal of revenue when related uncertainties become resolved. Sales-based milestones and royalties are not included in the transaction price until the sales occur because the underlying value relates to the license and the license is the predominant feature in the Viatris Collaboration. As of June 30, 2021, the transaction price allocated to the unfulfilled performance obligations was $101.3 million.

We recognize revenue and estimate deferred revenue based on the cost of development service incurred over the total estimated cost of development service to be provided for the development period. For revenue recognition purposes, the development period is estimated to continue through 2025. It is possible that this period will change and is assessed at each reporting date.

For the three and six months ended June 30, 2021, we recognized revenue related to development services of $1.4 million and $2.9 million, respectively. For the three and six months ended June 30, 2020, we recognized revenue related to development services of less than $0.3 million and $0.3 million, respectively.

Fosun License Agreement

Agreement Terms

In December 2018, we entered into a license agreement (the “Fosun License Agreement”) with Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd., a wholly-owned subsidiary of Shanghai Fosun Pharmaceutical (Group) Co., Ltd (“Fosun”), whereby we granted Fosun the exclusive rights to develop and commercialize our proprietary DaxibotulinumtoxinA for Injection in mainland China, Hong Kong and Macau (the “Fosun Territory”) and certain sublicense rights.

Fosun has paid us non-refundable upfront and other payments totaling $31 million before foreign withholding taxes. We are also eligible to receive (i) additional remaining contingent payments of up to $229.5 million upon the achievement of certain milestones based on (a) the approval of BLAs for certain aesthetic and therapeutic indications and (b) first calendar year net sales, and (ii) tiered royalty payments in low double digits to high teen percentages on annual net sales. The royalty percentages are subject to reduction in the event that (i) we do not have any valid and unexpired patent claims that cover the

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product in the Fosun Territory, (ii) biosimilars of the product are sold in the Fosun Territory or (iii) Fosun needs to pay compensation to third parties to either avoid patent infringement or market the product in the Fosun Territory.

Revenue Recognition

We estimated the transaction price for the Fosun License Agreement using the most likely amount method. We evaluated all of the variable payments to be received during the duration of the contract, which included payments from specified milestones, royalties, and estimated supplies to be delivered. We will re-evaluate the transaction price at each reporting period and upon a change in circumstances. As of June 30, 2021, the transaction price allocated to unfulfilled performance obligation was $31 million.

For the three and six months ended June 30, 2021 and 2020, no revenue was recognized from the Fosun License Agreement.

Contract liabilities from contracts with our collaboration revenue customers are as follows:


	June 30,		December 31,
(in thousands)	2021		2020
Contract liabilities:
Deferred revenue, current - Viatris	$	8,317	$	7,851

Total contract liabilities, current	$	8,317	$	7,851

Deferred revenue, non-current - Viatris	$	44,118	$	46,299
Deferred revenue, non-current - Fosun	30,995		30,995
Total contract liabilities, non-current	$	75,113	$	77,294

Changes in our contract liabilities from contracts with our collaboration revenue customers for the six months ended June 30, 2021 are as follows:


	(in thousands)
Balance on January 1, 2021	$	85,145
Revenue recognized	(2,905)
Billings and adjustments, net	1,190
Balance on June 30, 2021	$	83,430

Service Revenue

Following the HintMD Acquisition in July 2020, we began to offer customer payment processing and certain value-added services through the HintMD Platform to aesthetic practices. We have also launched the beta testing phase of the Next-generation Platform as PayFac, which has not generated material revenue to date. Generally, revenue related to the payment

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processing service is recognized at a point in time, whereas revenue related to the value-added services is recognized over time.

Receivables and contract assets from contracts with our service revenue customers are as follows:


	June 30,		December 31,
(in thousands)	2021		2020
Accounts receivables, net	$	99	$	142
Contract assets:
Contract assets, current	$	125	$	30
Contract assets, non-current	324		85
Total contract assets	$	449	$	115

3. Cash Equivalents and Short-Term Investments

The following table is a summary our cash equivalents and short-term investments:


	June 30, 2021						December 31, 2020
			Unrealized
in thousands	Cost		Loss		Fair Value		Cost		Fair Value
Money market funds	$	162,052	$	—	$	162,052	$	267,130	$	267,130
Commercial paper	146,859		—		146,859		113,446		113,446
Corporate bonds	21,805		(2)		21,803		—		—
Total cash equivalents and available-for-sale securities	$	330,716	$	(2)	$	330,714	$	380,576	$	380,576

Classified as:
Cash equivalents					$	162,052			$	277,629
Short-term investments					168,662				102,947
Total cash equivalents and available-for-sale securities					$	330,714			$	380,576

As of June 30, 2021 and December 31, 2020, we have no other-than-temporary impairments on our available-for-sale securities and the contractual maturities of the available-for-sale securities are less than one-year.

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4. Intangible Assets, net

The following table sets forth the intangible assets and the remaining useful lives for the intangible assets:


	June 30, 2021							December 31, 2020
(in thousands, except for in years)	Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Distribution rights	2.9	$	32,334	$	(8,757)	$	23,577	3.4	$	32,334	$	(4,715)	$	27,619
Developed technology	5.4	35,800		(3,670)		32,130		5.6	19,600		(1,362)		18,238
In-process research and development (1)	N/A	—		—		—		N/A	16,200		—		16,200
Customer relationships	3.1	10,300		(2,360)		7,940		3.6	10,300		(1,072)		9,228
Tradename	0.1	100		(92)		8		0.6	100		(42)		58
Total intangible assets		$	78,534	$	(14,879)	$	63,655		$	78,534	$	(7,191)	$	71,343

(1)In-process research and development relates to the research and development of payment facilitator technology to facilitate the processing of customer payments. During the quarter ended June 30, 2021, the in-process research and development assets were placed into service and reclassified as developed technology.

Aggregate amortization expense for the intangible assets presented in the condensed consolidated statements of operations and comprehensive loss are summarized as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Amortization (1)	$	3,512	$	674	$	6,350	$	674
Selling, general and administrative	669		—		1,337		—
Total amortization expense	$	4,181	$	674	$	7,687	$	674

(1)The amortization expense related to Distribution rights and Developed technology was recorded to “amortization” in the condensed consolidated statement of operations and comprehensive loss.

Based on the amount of intangible assets subject to amortization as of June 30, 2021, the estimated amortization expense for each of the next five fiscal years and thereafter was as follows:


Year Ending December 31,	(in thousands)
2021 remaining six months	$	8,320
2022	16,625
2023	16,625
2024	10,837
2025	5,967
2026 and thereafter	5,281
Total