A class action lawsuit was filed against Revance Therapeutics, Inc. (RVNC) by Levi & Korsinsky on January 3, 2025. The plaintiffs (shareholders) alleged that they bought RVNC stock at artificially inflated prices between February 29, 2024 and December 6, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Revance Therapeutics stock during that period can click here to learn about joining the lawsuit.
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Revance Therapeutics is a biotechnology company that is focused on developing, acquiring, and marketing novel botulinum toxin products for multiple aesthetic and therapeutic applications. The company entered into a “Distribution Agreement” with Teoxane SA (Teoxane) in January 2020, granting it the sole right to import, market, promote, sell, and distribute Teoxane’s line of dermal fillers.
Meanwhile, Revance was also expected to undergo a merger with Crown Laboratories, Inc., (Crown) and become a private company.
The company’s claims about the distribution agreement with Teoxane and the possible litigation risks related to the tender offer from Crown Laboratories are at the heart of the current complaint.
Revance Therapeutics’ Misleading Claims
According to the lawsuit, Revance and two of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the company’s compliance with the Distribution Agreement, the effect that its lack of compliance could have on a merger with Crown Laboratories, and ancillary issues from SEC filings and related material.
For instance, during the Class Period, Revance noted in the annual report for Fiscal 2023 that the company was required to meet certain minimum purchase obligations and expenditure requirements during each year of the term. Additionally, Revance mentioned in a quarterly report dated May 9, 2024, that the minimum purchase obligation for Fiscal 2024 stood at $52 million and the obligation for the next year would be based on the projected market growth rate.
Finally, in a quarterly report dated August 12, 2024, Revance noted that according to the terms of the merger agreement with Crown Laboratories, the latter will commence a tender offer to acquire all of Revance’s outstanding shares at $6.66 per share in cash, reflecting a total enterprise value of $924 million.
However, subsequent events (discussed below) revealed that the defendants wilfully misled investors about the distribution agreement with Teoxane and the related fallout in the merger agreement with Crown Laboratories.
Plaintiffs’ Arguments
The plaintiffs maintain that the Defendants deceived investors by lying and withholding critical information about the business practices and prospects during the Class Period. Importantly, the Defendants are accused of misleading investors about the material breach of contract related to the Distribution Agreement with Teoxane and the ill impact on its merger agreement with Crown.
The information became clear on December 9, 2024, when the company announced that Crown and Revance modified the merger agreement, slashing the offer price. Under the revised agreement, Crown made a tender offer to acquire all of Revance’s outstanding shares at $3.10 per share in cash, significantly lower than the prior offer.
Following the news, RVNC stock plunged by 20.8%. Revance and Crown eventually completed the merger on February 6, 2025.
To conclude, the defendants allegedly misled investors about the breach of the distribution agreement with Teoxane and its adverse impact on merger with Crown. In the three years leading up to the merger with Crown and becoming a private company, Revance stock lost 71.1%, causing massive damage to shareholders.
