The Food and Drug Administration rejected Revance Therapeutics‘ (RVNC) frown lines treatment, causing RVNC stock to crash to an 18-month low on Monday.

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In its letter, the FDA cited manufacturing deficiencies. Those issues were highlighted in a form made public last week. During its inspection, the FDA identified five different deficiencies related to cell bank quality testing methods, discrepancies with the proposed commercial manufacturing processes and quality control procedures, Needham analyst Serge Belanger said in a note.

Now, Revance says it will seek a meeting with the FDA to address those problems. At the minimum, Belanger expects a six- to 12-month delay for the drug called DaxibotulinumtoxinA. That assumes the deficiencies are minor and Revance can address them quickly.

“The worst case scenario involves significant work to address the issues, leading to resubmission of the (biologics license agreement) in the second half of 2022 or beyond, leading to a greater than 12-month delay and significantly higher regulatory risk around the approval of Daxi,” Belanger said.

On the stock market today, RVNC stock collapsed 39.2% to 13.81.

RVNC Stock Hits A Low On Rejection

RVNC stock went through the wringer last week.

Shares tumbled more than 25% in a day after a form outlining the FDA’s concerns became public. Mizuho Securities analyst Vamil Divan says questions emerged regarding the FDA’s ongoing review of the frown lines injection.

“Based on the letter and our follow-up conversation with management, it appears that the only issues mentioned in the (rejection letter) relate to what FDA already highlighted in the (form),” he said in a report. “Management felt that they had addressed those issues in the response they sent to the FDA later in July, but clearly those responses were not acceptable to the agency.”

Divan expects a 12- to 15-month delay for Revance’s drug. That’s on top of an earlier delay when, due to the pandemic, the FDA wasn’t able to inspect Revance’s northern California facility. Initially, the FDA expected to make a decision on the drug last November. He reiterated his buy rating on RVNV stock, but cut his price target to 26 from 36.

“All told, we assume Daxi’s approval is likely now pushed out to the second half of 2022 at the earliest,” he said. “We (perhaps conservatively) assume a late 2022 approval and early 2023 launch.”

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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