Revance Therapeutics Annual Report 2015

Plain-text annual report

REVANCE THERAPEUTICS, INC. FORM 10-K (Annual Report) Filed 03/04/16 for the Period Ending 12/31/15 Address Telephone CIK 7555 GATEWAY BLVD. NEWARK, CA 94560 510-742-3400 0001479290 Symbol RVNC SIC Code Fiscal Year 2834 - Pharmaceutical Preparations 12/31 http://www.edgar-online.com © Copyright 2016, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2015or¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For 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 ofincorporation or organization) (I.R.S. EmployerIdentification Number) 7555 Gateway BoulevardNewark, California 94560(510) 742-3400(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) Securities registered pursuant to Section 12(b) of the Act:Title of Each Class Name of Exchange on Which RegisteredCommon Stock, par value $0.001 per share The NASDAQ Stock Market LLCSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No xIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No xIndicate 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 12months (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 x No ¨Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted andposted 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 and postsuch files). Yes x No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “largeaccelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer¨Accelerated filer¨ Non-accelerated filerx (Do not check if a smaller reporting company)Smaller reporting company¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No xThe aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed secondfiscal quarter was approximately $469.5 million, based on the closing price of the registrant’s common stock on the NASDAQ Global Market of $31.98 per share for such date.Number of shares outstanding of the registrant's common stock, par value $0.001 per share, as of February 26, 2016: 28,433,208DOCUMENTS INCORPORATED BY REFERENCENone Table of ContentsTable of Contents PagePART I Item 1Business1Item 1ARisk Factors24Item 1BUnresolved Staff Comments53Item 2Properties54Item 3Legal Proceedings55Item 4Mine Safety Disclosures56 PART II Item 5Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities57Item 6Selected Financial Data60Item 7Management’s Discussion and Analysis of Financial Condition and Results of Operations61Item 7AQuantitative and Qualitative Disclosures about Market Risk80Item 8Financial Statements and Supplementary Data81Item 9Changes in and Disagreements with Accountants on Accounting and Financial Disclosure82Item 9AControls and Procedures83Item 9BOther Information84 PART III Item 10Directors, Executive Officers and Corporate Governance85Item 11Executive Compensation90Item 12Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters95Item 13Certain Relationships and Related Party Transactions, and Director Independence99Item 14Principal Accounting Fees and Services100 PART IV Item 15Exhibits, Financial Statement Schedules101Signatures “Revance Therapeutics,” the Revance logos and other trademarks or service marks of Revance appearing in this annual report on Form 10-K are the property ofRevance. This Form 10-K contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. We do not intend ouruse 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.Table of ContentsSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K, or Form 10-K, contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934,as amended, or the Exchange Act, which are subject to the “safe harbor” created by that section. The forward-looking statements in this Form 10-K are containedprincipally under “Item 1. Business,” “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Insome cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,”“believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance orachievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonablebasis for each forward-looking statement contained in this Form 10-K, we caution you that these statements are based on a combination of facts and factors currently knownby us and our projections of the future, about which we cannot be certain. These forward-looking statements include, but are not limited to, statements concerning thefollowing: •our expectations regarding the results and the timing of clinical trials in our development of DaxibotulinumtoxinA Topical Gel (RT001), or RT001 topical, for thetreatment of crow’s feet, hyperhidrosis or other indications;•our expectations regarding the results and the timing of clinical trials of DaxibotulinumtoxinA for Injection (RT002), or RT002 injectable, for the treatment ofglabellar lines, cervical dystonia or other indications;•our expectations regarding our future development of RT001 topical and RT002 injectable for other indications, including therapeutic indications;•our expectation regarding the timing of our regulatory submissions for approval of RT001 topical for the treatment of crow’s feet, hyperhidrosis, and otherindications in the United States, Europe and other countries;•our expectation regarding the timing of our regulatory submissions for approval of RT002 injectable for the treatment of glabellar lines, cervical dystonia, andother indications in the United States, Europe and other countries;•the potential for commercialization of RT001 topical and RT002 injectable, if approved, by us;•our expectations regarding the potential market size, opportunity and growth potential for RT001 topical and RT002 injectable, if approved for commercial use;•our belief that RT001 topical and RT002 injectable can expand the overall botulinum toxin market;•our ability to build our own sales and marketing capabilities, or seek collaborative partners including distributors, to commercialize our product candidates, ifapproved;•our ability to transfer manufacturing from third parties to our facility and to scale up our manufacturing capabilities;•estimates of our expenses, future revenue, capital requirements and our needs for additional financing;•the timing or likelihood of regulatory filings and approvals;•our ability to advance product candidates into, and successfully complete, clinical trials;•the implementation of our business model, strategic plans for our business, product candidates and technology;•the initiation, timing, progress and results of future preclinical studies and clinical trials, and our research and development programs;•the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;•our ability to establish collaborations or obtain additional funding on acceptable terms, if at all;•our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012, or the JOBSAct;•our financial performance; and•developments and projections relating to our competitors and our industry.Table of ContentsIn addition, you should refer to “Item 1A. Risk Factors” in this Form 10-K for a discussion of these and other important factors that may cause our actual results to differmaterially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in thisForm 10-K will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significantuncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve ourobjectives and plans in any specified time frame, or at all. Also, forward-looking statements represent our estimates and assumptions only as of the date of this Form 10-K.We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required bylaw.Table of ContentsPART I ITEM 1.BUSINESSOverviewRevance Therapeutics, Inc. is a clinical-stage biotechnology company focused on the development, manufacturing, and commercialization of novel botulinum toxinproducts for multiple aesthetic and therapeutic indications. We are leveraging our proprietary portfolio of botulinum toxin type A compounds, combined with our patentedTransMTS® peptide delivery system, to address unmet needs in large and growing neurotoxin markets. Our proprietary TransMTS technology enables delivery ofbotulinum toxin type A through two investigational drug product candidates, DaxibotulinumtoxinA Topical Gel (RT001), or RT001 topical, and DaxibotulinumtoxinA forInjection (RT002), or RT002 injectable. We are pursuing clinical development for RT001 topical and RT002 injectable in a broad spectrum of aesthetic and therapeuticindications. Neither formulation of our product candidates contains albumin or any other animal or human-derived materials. We believe this reduces the risk of thetransmission of certain viral diseases. We hold worldwide rights for all indications of RT001 topical, RT002 injectable, and our TransMTS technology platform.RT001 topical has the potential to be the first commercially available non-injectable formulation of botulinum toxin type A. We are studying RT001 topical foraesthetic indications, such as crow's feet (wrinkles around the eyes, also known as lateral canthal lines), and therapeutic indications, such as axillary hyperhidrosis(underarm excessive sweating). RT002 injectable is a novel, injectable formulation of botulinum toxin type A designed to be a targeted and long-lasting injectablebotulinum toxin treatment. We are studying RT002 injectable for aesthetic indications, such as glabellar (frown) lines and therapeutic indications, such as cervical dystonia.We believe both product candidates have the potential to expand into additional aesthetic and therapeutic indications in the future.PIPELINEPRE-CLINICALPHASE 1PHASE 2PHASE 32016 PLANNED MILESTONESRT001 TOPICAL PRODUCT CANDIDATE Lateral Canthal Lines(Crow’s Feet) Report US Phase 3 pivotal study efficacy results -1H2016. Hyperhidrosis(Excessive Sweating) Complete current Phase 2 study - 1H 2016.Initiate additional Phase 2 study. Other Therapeutic Indications RT002 INJECTABLE PRODUCT CANDIDATE Glabellar (Frown) Lines Conduct End-of-Phase 2 Meeting with FDA - 1H2016. Initiate Phase 3 program - 2H 2016. Cervical Dystonia Report interim Phase 2 study results - 1H 2016. Other Therapeutic Indications 1Table of ContentsOur Product CandidatesDaxibotulinumtoxinA for Injection (RT002) or RT002 InjectableWe are developing an injectable formulation of botulinum toxin type A, which we refer to as RT002 injectable, for indications where deep delivery of the botulinumtoxin is required and a long-lasting effect is desired. We believe RT002 injectable may provide a targeted delivery of botulinum toxin to intended treatment sites whilepotentially reducing the unwanted spread of botulinum toxin to adjacent areas. We believe, and our preclinical and clinical studies indicate, that this targeted delivery,enabled by our proprietary peptide technology, may permit safe administration of higher doses of botulinum toxin and may result in long-lasting effect. We are initiallyfocused on developing RT002 for the treatment of glabellar lines and cervical dystonia.Glabellar LinesGlabellar lines are the result of gathering the tissue between the eyebrows into a fold. They are caused by the repeated action of underlying muscles associated withfacial expression. Years of squinting and frowning tend to leave deep wrinkles in the skin between the eyebrows and on the bridge of the nose, across the forehead and atthe corners of the eyes. On many people, frown lines produce an angry or sad look that detracts from a pleasant facial appearance. Physical, emotional and social reasons fortreating frown lines and forehead furrows include improved appearance and enhanced self-esteem. The most common cosmetic use of the market leader, BOTOX®Cosmetic is for the treatment of glabellar lines. In general, consumers enjoy the benefits of botulinum toxin injections and there is a high rate of satisfaction. Longevity, orduration of effect, is the one area where consumers are less satisfied and desire longer duration.Botulinum toxin treatment of glabellar lines is the largest proportion of cosmetic neurotoxin sales in the United States and, according to the American Society forAesthetic Plastic Surgery, botulinum toxin treatment is the number one nonsurgical cosmetic procedure in the United States. We believe RT002 injectable has the potentialto satisfy significant unmet needs in this market. According to market research we conducted in April 2015, which involved a quantitative study with eighty dermatologistsand plastic surgeons, 60% of the physicians surveyed stated that longer duration is a significant unmet need in the market for the botulinum toxin treatment of glabellar linesand 75% stated that they are likely or very likely to use RT002 injectable based on both injectable data available during the study and the RT002 injectable product concept.Also, primary market research among over 30 leading aesthetic physicians indicated that they were very impressed by the clinical data generated in the RT002 Phase1/2 study. In fact, those physicians reported that if RT002 injectable demonstrated similar results in larger trials the increased duration of effect would cause them to changetheir treatment habits from currently available botulinum toxins to RT002 injectable. While potentially increased safety due to decreased spread to adjacent muscles was anappealing benefit in cosmetic indications, duration of effect was reported to be the primary driver of adoption.We believe that a product that still shows meaningful consumer benefit at six months would fit very nicely into the current treatment regimen and consumer habits.Most consumers only visit their physicians twice per year for treatments and the longer duration would mean that they would remain satisfied between treatments.Additionally, a longer lasting botulinum toxin product may align more closely with the duration of dermal filler treatments, which often are administered at the same time asbotulinum toxin treatments.We believe that RT002 injectable may provide the following benefits to patients and physicians for treatment of glabellar lines, as compared to the market leader,BOTOX® Cosmetic:•RT002 injectable may permit longer lasting effect of 6 months.•RT002 injectable may provide targeted delivery of botulinum toxin to intended treatment sites while potentially reducing the unwanted spread of botulinumtoxin to adjacent areas. This could potentially decrease unwanted side effects like eyelid ptosis (droopy eyelids) and patient dissatisfaction.2Table of ContentsWe believe that RT002 injectable may provide the following benefits to physicians:•RT002 injectable may be simple to use and consistent with administration of currently available marketed products. Minimal training is required becauseadministration would be similar to currently available marketed products.•RT002 injectable may lead to more sustained patient satisfaction between treatments, which is critical for self-pay procedures.•RT002 injectable could potentially expand their practices by appealing to consumers (particularly men) who are not willing to come in multiple times per yearto sustain the benefits of treatment.•Physicians may be willing to pay more for RT002 injectable compared to currently available neurotoxins as they believe that they could easily pass that costalong to their patients, who would be willing to pay for increased duration of effect.•In phase 2 studies, RT002 injectable appeared to be well-tolerated with no significant safety concerns.Development of RT002 Injectable for Treatment of Glabellar LinesPhase 1 and 2 Clinical Trials. We believe RT002 injectable may provide targeted delivery of botulinum toxin to intended treatment sites while reducing the unwantedspread of botulinum toxin to adjacent areas. We believe this could permit long-lasting effect and safe administration of botulinum toxin, even with higher targeted doses.These properties, longer lasting effect and reduced spread of botulinum toxin, have been demonstrated in a four-cohort Phase 1/2 clinical dose escalation trial outside theUnited States for improvement of glabellar lines. In the study, RT002 injectable met its primary efficacy and safety endpoints. The open-label, dose escalating, Phase 1/2study enrolled 48 adults in four cohorts. All subjects had Severe or Moderate wrinkles at baseline, measured using the 4-point Global Line Severity Scale (GLSS). Insummary, the data showed:•96% of subjects were rated with None or Mild wrinkle severity at maximum frown 4 weeks post-treatment using the GLSS as assessed by the clinicalinvestigator.•83% of subjects assessed themselves as achieving None or Mild wrinkles at maximum frown at the same time point.•In the final cohort, the only one where duration of effect was measured, RT002 injectable achieved a median duration of 29.4 weeks or seven months based onboth investigator and subject assessments.•In this final cohort, 60% of subjects maintained None or Mild wrinkle severity at 6 months.•RT002 injectable was well-tolerated, and there was no evidence of spread beyond the treatment site at any dose; additionally, adverse event rates did notchange in frequency, severity, or type with increasing doses.RT002 appeared to be generally safe and well-tolerated with minimal adverse events in our Phase 1/2 trial. Adverse events were generally mild, localized andtransient. The most common adverse events observed were headache and injection site reactions. There was no evidence of spread beyond the treatment site at any dose.There were no serious adverse events or evidence of any systemic exposure based on clinical laboratory results and related evaluations. Adverse event rates did not changein frequency, severity, or type with increasing doses.Based on the results of this study, Revance initiated BELMONT, a Phase 2, Randomized, Double- B lind, Dos E Ranging, Active and P L acebo Controlled, M ulti-Center Study to Evaluate the Safety, Efficacy, and Duration of Effect O f RT002, a Botuli N um T oxin Type A for Injection, injectable to treat glabellar lines. The primaryendpoints for the study are the investigator's assessment of glabellar line severity at maximum frown at Week 24 and median duration of effect from the date of treatmentback to baseline severity. The BELMONT trial evaluated treatment for glabellar lines in 268 subjects with moderate to severe glabellar lines at nine investigational sites inCanada. The trial compares the safety, efficacy and duration of three doses of RT002 injectable, the labeled dose of the current market leader BOTOXCosmetic/VISTABEL® and a placebo control in a randomized 1:1:1:1:1 trial design. In October 2015, we reported topline interim data from the trial that showed RT002injectable achieved its primary efficacy measurement at four weeks for all doses of RT002 injectable and that such efficacy was highly statistically significant as comparedto placebo. In addition, the 40 unit dose of RT002 injectable demonstrated a 23.6-week median duration versus BOTOX® Cosmetic with an 18.8-week median duration.Across all cohorts, RT002 injectable appeared to be generally safe and well-tolerated. We plan to conduct an End-of-Phase 2 meeting with the U.S. Food and DrugAdministration, or FDA, in the first half of 2016. We then expect to begin Phase 3 clinical studies of RT002 injectable for the treatment of glabellar lines in the second halfof 2016. If approved, we believe RT002 injectable has the potential to satisfy significant unmet needs.3Table of ContentsCervical Dystonia and Other Muscle Movement DisordersWe have also been developing RT002 for the treatment of cervical dystonia, a muscle movement disorder. We will continue to evaluate development for othertherapeutic indications, such as neurological movement and other disorders, based on the results of our current preclinical studies and clinical trials. Muscle movementdisorders, such as cervical dystonia, are neurological conditions that affect a person's ability to control muscle activity in one or more areas of the body. Muscle spasticityhappens after the body's nervous system has been damaged, most commonly by a stroke, disease, or trauma. While not life-threatening, spasticity can be painful and mayhave a significant effect on a person's quality of life. Some tasks, like getting dressed or bathing, become difficult, and a person's self-esteem may be affected by theirabnormal posture. Common muscle movement disorders include cervical dystonia (excessive pulling of the muscles in the neck and shoulder), upper or lower limbspasticity (stiffness in muscles), and blepharospasm (involuntary closing of the eyelids). Botulinum toxin type A has proven safe and effective for such uses, as the mostcommon treatment for muscle movement disorders is to relax the muscle by injecting it with botulinum toxin. Spasticity was the first approved indication for BOTOX®.We believe muscle movement disorders accounted for approximately $900 million of therapeutic neurotoxin sales globally in 2014.RT002 Injectable for Treatment of Cervical DystoniaWe have initiated a Phase 2 dose-escalating, open-label clinical study of RT002 injectable for the treatment of cervical dystonia. The Phase 2 study will evaluatesafety, preliminary efficacy, and duration of effect of RT002 in subjects with moderate-to-severe isolated cervical dystonia symptoms of the neck. We completed enrollmentin the first cohort and expect to release interim results in the first half of 2016.DaxibotulinumtoxinA Topical Gel (RT001) or RT001 TopicalRT001 topical is a topical gel formulation of botulinum toxin type A in a proprietary single-use applicator. The botulinum toxin in RT001 topical blocksneuromuscular transmission by binding to receptor sites on motor or sympathetic nerve terminals, entering the nerve terminals and inhibiting the release of specificneurotransmitters. For example, when applied topically around the eye, RT001 topical produces partial interruption of the nerve signaling to the orbicularis oculi muscle,resulting in a localized reduction in muscle activity and improvement in crow’s feet and may offer improvement in skin texture and luminosity of the skin. When appliedtopically for the treatment of hyperhidrosis, RT001 topical produces temporary interruption of the nerve signaling to the sweat glands, resulting in local reduction in axillarysweating.RT001 topical is applied to the skin and uses our proprietary TransMTS® technology, consisting of a proprietary peptide, to enable delivery of botulinum toxin acrossthe skin, eliminating the need for injections. We plan to supply RT001 topical in a single-use applicator for reconstitution and administration that contains a vial oflyophilized, or freeze-dried, drug product and a vial of diluent for reconstitution. When the contents of these vials are combined, all within the single-use applicator, thediluent reconstitutes the freeze-dried drug product back to its original form to allow administration. In our crow's feet clinical trials, RT001 topical is administered as a geland spread over the treatment area with a gloved finger, where it remains for 30 minutes. The application process is a simple procedure that requires minimal time toprepare and can be applied by either physician or medical staff. The gel is then removed by a series of gentle cleansing wipes, deactivated and disposed.We are developing and plan to commercialize RT001 topical for indications where topical application provides a meaningful advantage over injectableadministration. RT001 is designed to have several such advantages, including painless topical administration, no bruising, ease of use and limited dependence onadministration technique by physicians and medical staff. We believe these potential advantages may improve the experience of patients undergoing botulinum toxinprocedures and make RT001 topical suitable for multiple indications.The first indications we are pursuing are in the fields of dermatology and plastic surgery. If approved, we believe RT001 topical can expand the overall botulinumtoxin aesthetic market by appealing to new patients who would prefer a needle-free approach to treatment. The aesthetic dermatology market is attractive because webelieve that patients in this market tend to be open to trying new products and paying for aesthetic procedures out of pocket, reducing our reliance on reimbursement. Weare focused on this market not only because of its size and growth potential but also because, in the United States and Europe, this market can be accessed by a specialtysales force and distributor network. We are also developing RT001 topical for therapeutic applications where botulinum toxin has shown efficacy and that are particularlywell suited for needle-free treatments.Lateral Canthal Lines, or Crow’s Feet4Table of ContentsCrow’s feet are skin wrinkles in the outer corner of the eye area, which are commonly caused by aging. Consumers in general, and women in particular, believe thatthe eye area is the first place where they notice the signs of aging. Consumers also believe that the perception of aging is affected by the quality of the skin. A large segmentof the anti-aging topical cosmeceutical market is targeted towards improvement in skin texture and luminosity of the skin in the eye area. Despite the fact that prior toSeptember 2013 there were no botulinum toxin products approved for crow’s feet, we believe that there has been significant use of botulinum toxin for this indication giventhe desire of consumers to address the condition.We believe that RT001 topical may provide the following benefits to patients and physicians for treatment of crow’s feet, as compared to traditional botulinum toxintreatments that are administered by injection:•The RT001 topical procedure is painless and has not shown any evidence of bruising, swelling or any of the other adverse events associated with injections . TheRT001 topical procedure consists of a clear gel applied to the skin, remaining on the skin for 30 minutes and then removed with a series of gentle cleansing wipes.•RT001 topical relaxes the crow’s feet wrinkles appearance at “rest,” when the face is in a neutral expression, while still allowing a natural smile . Data from ourPhase 2b clinical trials indicate that RT001 topical improves the appearance of crow’s feet at rest. This improvement is visible to both the consumer and thephysician. By targeting only the muscles necessary to achieve this effect, treatment with RT001 topical allows for natural expression at smile. In comparison,injection involves a broader array of muscles, which can lead to an unwanted frozen face appearance even at smile.•Consumers distinguish between products that are injected into the body and those that are placed on the skin . Of the participants surveyed in consumer marketresearch performed by a third party on our behalf in 2012, a majority of those who responded that they have not received injectable botulinum toxin treatments inthe past but who did find the RT001 topical product concept appealing, listed their aversion to needles as the reason why they have not previously tried theinjectable botulinum toxin treatments. The responses in this survey, including open-ended questions, suggest that 63% of consumers in the group surveyed aremore likely to use RT001 topical over injectable options.We believe that RT001 topical may provide the following benefits to physicians:•RT001 topical has been shown to be well-tolerated with no significant safety concerns . There has been no report of the spread of botulinum toxin away fromtreatment site.•RT001 topical is simple to use and results are not technique dependent. RT001 topical comes in a pre-filled applicator that contains the proper dose for thetreatment of crow’s feet . A physician or medical staff applies droplets of the gel from our pre-filled applicator to the treatment area and uses a gloved finger toensure that the entire area is covered. In contrast, a great deal of physician skill is required to accurately and precisely inject current needle-based botulinum toxinproducts into smaller, more superficial muscles to achieve a natural looking appearance in the crow's feet area. According to our market research data collected bya third-party research organization in 2009 through internet-based surveys and interviews: 82% of the 204 physicians surveyed with existing cosmetic revenuessaid that they were either “extremely interested” or “very interested” in purchasing the RT001 topical product concept for use in their patients; and 76% of the 204physicians surveyed mentioned the benefits of topical administration, including no need for needles and easy and convenient administration, as why they liked theRT001 topical product concept.•RT001 topical is very appealing to both key physicians and practice groups who perform the majority of cosmetic procedures in the United States and physicianswho have less injectable botulinum toxin experience . We believe that RT001 topical can expand the use of botulinum toxin to a wider range of physicians andallow those physicians who currently perform botulinum toxin procedures to do so on a larger number of patients. RT001 topical can also improve the profitabilityof practices by increasing the number of procedures a given patient receives per visit. Importantly, this expansion can come without any increase in the number ofpatients that the physician has in their practice. In addition, because the RT001 topical procedure for the treatment of crow’s feet would be paid for directly bypatients, consistent with current aesthetic treatments, physicians would not be encumbered by managed care and government payor reimbursement restrictionsapplicable in the United States and similar reimbursement-related constraints outside the United States.5Table of ContentsDevelopment of RT001 Topical for Treatment of Crow’s FeetWe have conducted seventeen clinical trials, with a total of over 1,600 subjects, for the treatment of crow’s feet. In two of our Phase 2 clinical trials, RT001 topicaldemonstrated a statistically significant and clinically meaningful reduction in crow’s feet visible to both physicians and patients. After completing our Phase 2b clinicaltrials, we modified the formulation of the RT001 topical diluent by adding two ingredients to improve its stability. We then conducted a Phase 3 clinical trial with this newdiluent formulation to evaluate efficacy and safety of RT001 topical. Data generated from this clinical trial were inconsistent with the data from our previous three Phase 2bclinical trials for the treatment of crow’s feet. Specifically, we observed no improvement from baseline in either the placebo or RT001 topical group. We initiated two open-label studies to further assess our RT001 topical drug product candidate. Following analysis of the data available from these open-label studies, taken together with ouranalysis of prior studies and early data from newly developed clinical methods, we decided to proceed with a RT001 topical U.S. Phase 3 clinical trial for the treatment ofcrow's feet. Our clinical and other studies have consistently indicated that RT001 topical appears to be well-tolerated with no serious adverse events related to the studydrug or study treatment procedures or other safety concerns.Phase 3 Clinical Trials. We are in a Phase 3 development program of RT001 topical in North America for the treatment of crow’s feet. During the third quarter of2015, we initiated REALISE 1, a pivotal Phase 3 clinical trial designed to evaluate the safety and efficacy of a single, bilateral administration of RT001 topical compared toplacebo in approximately 450 subjects with moderate to severe crow's feet. We expect to report efficacy data from this study in the first half of 2016, and if successful, willneed to conduct additional Phase 3 studies in order to submit our Biologics License Application, BLA, to the FDA.REALISE 1 and a second U.S. Phase 3 pivotal trial will utilize the same basic study design and evaluate efficacy and safety of RT001 topical after singleadministration compared to placebo. Our second U.S. Phase 3 pivotal trial will also measure duration of effect. We plan to conduct a third Phase 3 pivotal clinical trial inthe European Union to support European Union marketing applications. The European trial will evaluate efficacy and safety of RT001 topical after single administrationcompared to placebo with a follow-up for safety.We have designed the long-term clinical trials to support a safety database adequate for both domestic and international marketing applications, and will continue toconduct clinical trials with periodic, thorough analyses of benefits and risks.Assuming successful completion of our Phase 3 clinical trials, we plan to file marketing applications in the United States, European Union and Canada. We anticipatethat approval in the United States and the European Union would then support approvals in Latin America, such as Brazil and certain other territories in Asia.European Union Agency Interactions. We requested scientific guidance from the European Medicines Agency, or EMA, on the development of RT001 topical for thetreatment of crow’s feet and the proposed Phase 3 program in March 2012. The EMA scientific guidance for the crow’s feet Phase 3 program was completed following ameeting with the EMA in August 2012. The EMA provided comments on Quality, Nonclinical and Clinical programs. Overall, the EMA agreed with the proposed programsand provided details and suggestions to be considered for our marketing application. We have taken the EMA comments into consideration in the Phase 3 program and willprovide data to support the various requests in the marketing application.End-of-Phase 2. After our Phase 2 clinical trials, we used the FDA’s Formal Dispute Resolution process and obtained written confirmation in May 2012 from theFDA that we had achieved End-of-Phase 2 and that our proposed indication, primary endpoint assessment and primary endpoint measurement were acceptable for Phase 3clinical trials. Specifically, the primary efficacy assessments are being conducted at rest and additional assessments are being obtained at smile.RT001 Topical SafetyClinical Program. Subjects have received doses of RT001 topical containing 1.1 to 25 ng/mL of botulinum toxin per subject and peptide exposures up to 23 mcg/mLper subject for the treatment of crow's feet. Repeat doses of RT001 topical have been administered in the Phase 2 trials and the Phase 1 trial with cumulative exposures up to50 ng/mL per subject. In all concentrations of peptide and botulinum toxin studied, RT001 topical appeared to be well-tolerated with no serious adverse events related tostudy drug or study treatment procedures or safety concerns. In particular, there were no systemic or local safety concerns at the site of application or evidence of spread andno significant differences in the incidence of treatment-related adverse events.Nonclinical Program. In accordance with international guidelines and in consultation with the FDA, we have also conducted a broad nonclinical developmentprogram for RT001 topical. The program included preclinical efficacy, safety6Table of Contentsbioavailability and single and repeat dose toxicity studies of RT001 topical, including chronic studies of up to nine months duration. Genotoxicity, local tolerance andformulation bridging studies were also conducted, along with reproductive toxicity testing. Together, these studies supported the clinical development and anticipated futuresafety labeling of RT001 topical for the treatment of crow’s feet.HyperhidrosisWe are also developing RT001 topical for therapeutic applications where botulinum toxin is particularly well suited for needle-free treatments. According topublished medical articles, hyperhidrosis affects approximately nine million people in the United States (or 2.8% of the current population), with approximately halfexperiencing axillary hyperhidrosis, or underarm excessive sweating. Prevalence in the United States is slightly higher among men than women, but women are more likelyto take action to have the condition treated. In 2014, the International Hyperhidrosis Society or IHHS fielded a survey among its email subscribers. While it is recognizedthat consumers who regularly read newsletters from the IHHS are likely to be more severe sufferers and those who are more likely to treat their disease, this survey doesprovide up to date information on this population. Additionally, we believe that these consumers may likely be early adopters of new treatments. In this population,hyperhidrosis is a multi-focal disease where the majority of people (81%) suffer in more than one focal area in addition to their underarms, most commonly the hands andfeet. Among this group of consumers, 90% have sought assistance from a medical professional (compared to 38% cited in medical literature that describes the generalpopulation of hyperhidrosis sufferers). Of the 90% who seek medical assistance, 79% receive a diagnosis of hyperhidrosis, and of those, 87% seek some type of treatment.The most commonly used treatments and percentage of respondents that use each are:•Over-the-counter antiperspirants (78%)•Prescription antiperspirants (77%)•Oral medication (53%)•Botulinum Toxin Injections (41%)•Iontophoresis, or the use of electrical current on skin (38%)•Surgery (13%)•Other (10%)Most of these treatments have low levels of satisfaction. Specifically, OTC antiperspirants, prescription antiperspirants and oral medications have satisfaction rates of5%, 11% and 26% respectively. Only botulinum toxin injections have a higher satisfaction rate versus dissatisfaction (53% versus 35%). Allergan’s Botox® was approvedin 2004 for axillary hyperhidrosis and remains the only botulinum toxin approved for the treatment of hyperhidrosis. However, the treatment requires up to 30 injections inthe underarms. Additionally, in qualitative research consumers who have tried botulinum toxin say that often the injections will “stop working” or cause compensatorysweating in other focal areas.Severe primary axillary hyperhidrosis affects approximately 1.5 million individuals in the United States and similar proportions globally. This condition has anegative impact on the overall quality of life of patients due to the debilitating psychosocial and emotional consequences of excessive sweating as well as significantmedical dermatologic impact. Despite this dramatic impact on quality of life there is a large unmet need for effective treatment given the low levels of treatmentsatisfaction. In fact, even among the most involved consumers survey by the IHHS almost 40% of them either don’t treat or had stopped treating their disease and werecoping with lifestyle adjustments (e.g. clothing choices, limited physical activity and avoiding social contact).Injected delivery of botulinum toxin has been validated as a therapeutically effective pharmaceutical agent for the treatment of hyperhidrosis. However, the injectedtreatment has not been widely embraced by hyperhidrosis patients because of significant pain and trauma associated with the large number of required injections.Having a topical solution could encourage more patients to seek treatment without having to suffer the pain of numerous injections. Additionally, a topical solutionmay more readily lend itself to treatment of other focal areas such as the palms or feet. From the physicians’ standpoint, injections are very time-consuming andreimbursement for the procedure is low. RT001 topical could significantly decrease the physician time and effort necessary for the procedure and potentially make theprocedure more profitable for a physician’s practice.7Table of ContentsWe also believe that the appeal of RT001 topical may go beyond the sufferers of hyperhidrosis and appeal to the one-third of all U.S. adults who simply believe theyhave too much underarm sweat. According to a 2008 survey by the International Hyperhidrosis Society, 60% of all U.S. adults reported that they would be “embarrassed” or“very embarrassed” by visible underarm sweat stains, and 70% of those U.S. adults who believe they have too much underarm sweat took steps to hide their condition.Development of RT001 Topical for Treatment of HyperhidrosisData from our initial Phase 2 dose escalation hyperhidrosis clinical trial suggest the feasibility of treating primary axillary hyperhidrosis with RT001 topical. As thedose of RT001 topical increased, patients showed reduced sweating and improvement in their self-assessed sweating severity. To test for sweat production, the skin wasfirst treated with iodine solution that is allowed to dry, and then followed by dusting of corn starch and sweat assessment period of ten minutes. The occurrence of sweatcauses the starch and iodine to dissolve permitting their reaction to form the dark staining pattern observed. Reduction in the dark staining intensity signals a reduction insweat.This initial Phase 2 clinical trial was a double-blind, randomized, placebo-controlled multi-center study evaluating the safety, tolerability and efficacy of usingRT001 topical to treat primary axillary hyperhidrosis in adults. This clinical trial was designed to enroll 36 subjects, with twelve subjects in each dosing group, or cohort.The safety of each cohort was evaluated by an independent data safety committee prior to escalating the dose to the next level. Subjects were randomized to receive a singletreatment of RT001 topical or placebo in each cohort. After receiving the treatment, the patients were followed for 28 days in the clinical trial.In September 2015, we initiated an additional randomized, double-blinded, dose-ranging, placebo-controlled Phase 2 clinical trial designed to evaluate the safety andefficacy of a single, bilateral application of RT001 topical for the treatment of primary axillary hyperhidrosis. This trial evaluated the efficacy of two different doses ofRT001 as compared to placebo. In December 2015, we reported positive interim results and, although the trial sample size was not chosen to meet statistical significance,using quantitative gravimetric measurements, the data was positive and showed that a single treatment of RT001 topical gel achieved clinically meaningful efficacy at Week4. On the primary quantitative assessment of average reduction from baseline in gravimetrically-measured sweat production at Week 4, the results ranged from 214.2 mg to165.7 mg (p=0.003 for the higher dose) per five minutes for RT001, compared to 66.3 mg per five minutes in patients who received placebo. These ranges corresponded to81.1% to 79.6% change for RT001, compared to 54.6% for placebo. On the primary qualitative efficacy assessment of a 2-point or greater response from baseline using theHyperhidrosis Disease Severity Scale, or HDSS, at Weeks 1 and 2 the results ranged from a 23.8% to 13.3 % improvement for RT001 compared to 11.8% at Week 1 and17.6% at Week 2 for placebo. By Week 4, there was a 14.3% to 13.3% improvement for RT001, compared to a 29.4% improvement in patients who received placebo. Theclinical study indicated that RT001 topical appeared to be well-tolerated with no serious adverse events related to the study drug or study treatment procedures or othersafety concerns. Adverse events were generally mild, localized and transient. The most common treatment-related events reported were application site erythema (redness),folliculitis (razor bumps) and application site pain. We plan to advance RT001 topical into a larger Phase 2 study for the treatment of hyperhidrosis in 2016, which will bedesigned to confirm a final dose. Upon successful completion of this study, we plan to meet with the FDA to discuss moving forward into Phase 3 studies.Migraine HeadacheMigraine headache is a central nervous system disorder characterized by moderate-to-severe headache and often includes additional symptoms such as nausea andvomiting. The global market for treatment of migraine headache was estimated to be $3.8 billion in 2009. Migraine headache affects 36 million people in the United States,14 million of whom suffer from chronic migraine headache. In the United States, this debilitating condition results in 113 million lost workdays and costs employers $13.0billion each year, according to the Migraine Research Foundation. Injected delivery of botulinum toxin has been validated as a therapeutically effective pharmaceuticalagent for the preventive treatment of migraine headache. Botox® was approved for the treatment of chronic migraine headache in 2010. However, the treatment requires upto 31 injections in a patient’s head and neck and may have significant side effects, including the potential for injected botulinum toxin to diffuse to neighboring sites causingmuscle weakness and pain, sometimes even triggering migraine headache attacks.Development of RT001 Topical for Prevention of Migraine HeadacheWe have generated preliminary data that support the feasibility of treating chronic migraine headache with topical application of RT001 topical. In our initial Phase 2clinical trial, RT001 topical was shown to be effective for the preventive treatment of chronic migraine headache. In this trial, RT001 topical was applied topically to fiveareas on the head, left on for 30 minutes and removed by a series of cleansing wipes. This trial, which used a 25 ng/mL dose, demonstrated statistically8Table of Contentssignificant improvement (43.8% for RT001 topical versus 10.5% for placebo) of the composite endpoint of a Headache Impact Test-6, or HIT-6, score, number of migrainesand migraine intensity.RT001 Topical for Treatment of Other IndicationsBased on the results of our future preclinical studies and clinical trials, we will determine further development of other indications for RT001 topical, such as:Neuropsychiatric disorders :Chronic daily headache , which is defined as an idiopathic headache occurring on more than 15 days per month for at least 3 months and a daily duration of at least 4hours, is considered as a headache disorder that may benefit from treatment with botulinum toxin A. It is likely that those patients with chronic daily headache (with orwithout medication overuse) who are severely impaired (i.e., highest loss of productivity) and who are not receiving any other prophylactic treatment are the appropriategroup of patients with a benefit from botulinum toxin. Since this total patient group shows a prevalence of up to 4% in population based epidemiological studies, it iswarranted to further elucidate the clinical efficacy of botulinum toxin in this subgroup.Major depressive disorder is a common and serious disease that may be resistant to routine pharmacologic and psychotherapeutic treatment approaches. Preliminarystudies have shown a single treatment of botulinum toxin in the forehead region can improve symptoms of depression in patients with major depressive disorder, or MDD,as defined by DSM-IV criteria. Positive effects on mood have been observed in subjects who underwent treatment of glabellar lines with botulinum toxin and, in an opencase series, depression remitted or improved after such treatment.Neuropathic pain is a condition that may arise as a result of a lesion or disease affecting the nervous system and, as a collection of syndromes, is often chronic in naturecausing significant negative impact to quality of life. Existing treatments include antidepressants, serotonin inhibitors and calcium channel agonists, each of which requiredaily dosing and are often accompanied by side effects and modest efficacy. More recently, injected botulinum toxin has been shown to address many forms of neuropathicpain and provide extended relief, of approximately three months, in line with the known duration profile for botulinum toxin treatment of other targets. RT001 topicalrepresents an appealing alternative with its topical delivery, allowing relatively large areas to be treated without injection pain while maintaining the potential benefit ofextended duration from a single treatment of botulinum toxin. RT001 topical is currently in preclinical development for neuropathic pain.Chronic inflammatory diseases :Psoriasis is a chronic skin condition that affects an estimated 125 million people worldwide, 2 to 3 percent of the total population, and is the most prevalent autoimmunedisease according to the World Psoriasis Day consortium. Animal-model studies have shown the potential role of botulinum toxin in inflammatory skin conditions,specifically demonstrating that botulinum toxin injections improved the clinical appearance of psoriasis.Eczema is another chronic inflammatory skin condition marked by dry, itchy skin. Atopic dermatitis - the most common form of eczema - affects millions of people,including an estimated six to 10 percent of children. Early research suggests that there could be a role for botulinum toxin in combating itch by better understanding theinteraction of the vascular system in inflammatory skin conditions. While there are available therapies to treat eczema and psoriasis, not all therapies are equally effective. In inflammatory conditions such as these, a topical botulinum toxin could potentially provide a viable treatment alternative to the current standard treatment, topicalsteroids, which have side effects, such as rosacea, perioral dermatitis, and acne.Rheumatic conditions : In rheumatology, botulinum toxin may be able to help treat painful blood vessel conditions, such as Raynaud’s disease and Scleroderma. In initialstudies, botulinum toxin injections have shown overall improvement in patient pain as well as a reduction in soft tissue ulceration.9Table of ContentsOur TechnologyOur Proprietary TransMTS® Technology PlatformOur TransMTS® peptide technology serves different purposes depending on whether it is used in a topical formulation, such as in RT001 topical, or in an injectableformulation, such as in RT002 injectable. In a topical formulation, the TransMTS® peptide technology enables transmembrane delivery of large macromolecules, such asour botulinum toxin type A, to the targeted tissue and eliminates the need for injections or other invasive procedures. In an injectable formulation, the TransMTS® peptidetechnology may restrict the active macromolecule to the target site and reduce unwanted spread to other neighboring tissues.The TransMTS® proprietary peptides are single, straight-chain, peptides which have two distinct types of domains:•The peptide backbone core is a sequence of consecutive lysine residues that are positively charged under physiologic conditions. The purpose of this positivelycharged core is to form a non-covalent (electrostatic) bond with the negatively charged macromolecule to be transported across the skin.•The second part of the peptide is a Protein Transduction Domain, or PTD, which is responsible for delivering the macromolecule to the target site. There are twoidentical PTDs at each end of the peptide.We believe our TransMTS® peptide technology could be applied to a range of active ingredient molecules. We have begun to leverage our TransMTS® platform todevelop additional products through partnering arrangements and may use our technology platform to develop additional proprietary products.Our Proprietary Botulinum Toxin-Peptide ComplexOur proprietary botulinum toxin-peptide complex has two components that contribute to the performance of RT001 and RT002. First, our TransMTS® peptideprovides the delivery across the skin and restricts the toxin molecule to the target site. Second, the botulinum toxin type A provides the mechanism of pharmacologic actionand is responsible for the drug effects demonstrated in our clinical trials.RT002 Injectable Delivery of Botulinum ToxinRT002 injectable utilizes our proprietary botulinum toxin-peptide complex in a saline-based formulation. In RT002 injectable, the peptide interacts with bothextracellular structures and cell surface receptors in the targeted muscle. This interaction restricts the toxin molecule to the target site and potentially reduces unwantedspread to other neighboring muscles. We believe that by limiting the spread of RT002 injectable to neighboring muscles, RT002 injectable is likely to be tolerated at higherdoses than Botox® Cosmetic. Additionally, at doses where the spread of BOTOX® Cosmetic and RT002 injectable were compared, RT002 injectable appeared to be moretargeted with longer duration in our preclinical studies. Nonclinical and clinical data taken together suggest that RT002 injectable may provide longer duration of effect atthe target muscle and reduce spread to untargeted muscles.RT001 Topical Botulinum Toxin-Peptide ComplexIn RT001 topical, our proprietary peptide carries and releases botulinum toxin to a defined depth of penetration targeting the mid-dermis, which is an appropriatedepth of skin penetration for the treatment of crow’s feet, hyperhidrosis, migraine headache, pain syndromes and other conditions.Our nonclinical and clinical data show that the absorption enhancer peptide is necessary for the botulinum toxin to cross the skin and have pharmacologic effect. Ourdata also show that the peptide alone does not have pharmacologic action and that the botulinum toxin molecule without the peptide cannot cross the skin to achieve itseffect.10Table of ContentsRT001 topical is applied to the skin as a clear gel. The gel is temperature-triggered so that it is liquid at ambient temperature and forms a gel as it warms upon contactwith the skin. RT001 topical quickly reaches a viscosity sufficient to remain in place in the defined treatment areaRT001 Topical Delivery of Botulinum ToxinThe absorption enhancer peptide has two pathways for the delivery of the botulinum toxin. The first pathway is energy independent and can occur in non-living cells,such as the stratum corneum, which is the outermost layer of the skin. This pathway allows the molecule to bind and traverse the stratum corneum where the molecule“shuttles” across the surface of the lipid layers in a process called “lipid rafting.”The second pathway is energy dependent and can only occur across living cells. It is an active process where transcytosis, the process by which molecules aretransported across the interior of a cell, takes the molecule from one side of the cell to another. The peptide triggers the cell to fold around the peptide, carrying the targetmolecule with it. This pathway releases RT001 topical on either side of the cell. When returned to the original side, no net change occurs; but when returned to the oppositeside, the contents have crossed the cell. The result is a net flow of RT001 topical from high to low concentration across the cells.Administration of RT001 Topical on the SkinThe proprietary applicator for delivering RT001 topical to multiple locations was developed to provide for simple storage, reconstitution and ease of applying RT001topical to the skin with minimal training.Botulinum toxin is not stable in liquid form. It must be lyophilized, or freeze-dried, for refrigerated storage and distribution. Injectable botulinum toxin products aredistributed as lyophilized powders in sealed vials. Before they can be injected into a patient, the products must be reconstituted by a trained healthcare provider by drawinga precisely measured volume of saline solution into a syringe through a needle, and then transferring it into the botulinum toxin vial through the needle.We designed our proprietary applicator in collaboration with Duoject, a supplier of medical devices and provider of design and development services, with over 25years of developing medical devices for drug reconstitution and delivery. The design of our applicator has several features focused on safety and ease-of-use, and is coveredby pending patents.We plan to supply RT001 topical in a single-use administration applicator containing a vial of our lyophilized drug product and a vial of diluent for reconstitution. Thevial of drug product is protected within our device to reduce potential for misuse as an injectable, and to eliminate the potential for needle stick injuries as could occur whenreconstituting currently available injectable botulinum toxin products. The pre-filled amounts of drug product and diluent ensure accurate preparation of the intendedconcentration and dosage for treatment.Once reconstituted, our device allows for storage of the dose within our device for up to eight hours, and then provides a means to easily administer the dose of RT001topical. RT001 topical is spread over the treatment area with a gloved finger, where it remains in place for 30 minutes and is then removed by a series of gentle cleansingwipes, deactivated and disposed. The entire application process is a simple procedure which requires minimal time to prepare and apply by physician or medical staff.The Botulinum Toxin MarketBotulinum toxin is a protein and neurotoxin produced by Clostridium botulinum . Since 1989 botulinum toxin in an injectable dose form has been used to treat avariety of aesthetic and therapeutic indications in the United States. Botulinum toxin has been approved for a variety of therapeutic indications including cervical dystonia,upper limb spasticity, blepharospasm, strabismus associated with neurological movement disorders, hyperhidrosis, migraine headache, overactive bladder conditions and,most recently, lower limb spasticity. In the United States, botulinum toxin has been approved to treat two aesthetic indications, glabellar lines and lateral canthal lines,although we believe that botulinum toxin is widely used for other aesthetic indications. Only three products, Allergan’s Botox ® Cosmetic, Ipsen and Galderma’s Dysport ®, and Merz’s11Table of ContentsXeomin ® , each of which is delivered in an injectable form, have been approved for the treatment of glabellar lines in the United States.According to UBS, the global market for botulinum toxin was estimated to be $3.4 billion in 2014 and has an estimated compound growth rate of 8.8% from 2015 to2020, reaching $5.3 billion by the end of this decade. The market is split into aesthetic ($1.4 billion in 2015) and therapeutic indications ($2.0 billion in 2015). We expectcontinued growth of the botulinum toxin market to be driven by new indications and product launches in new geographies. According to the National Library of Medicine,there are over 200 active clinical trials for a wide range of uses of botulinum toxin, with more than one-fifth of these identified as being in Phase 3 clinical development.While we are unaware of any clinical trials for potentially competitive topical products that may reach the market before RT001 topical, it is possible that clinical trials forsuch potentially competitive topical products have occurred or are occurring.The Opportunity for Botulinum Toxins for Aesthetic IndicationsToday’s culture places significant value on physical appearance, leading to widespread adoption of anti-aging and aesthetic treatments. The aesthetic market hasgrown dramatically in the United States, driven by a large population of consumers who are looking to delay signs of aging and improve general appearance.Injectable botulinum toxin treatments are the single largest cosmetic procedure in the United States and the rest of the world. According to the American Society forAesthetic Plastic Surgery, or ASAPS, a strong consumer preference for non-surgical options and the increasing availability of effective alternatives have prompted adoptionof non-surgical aesthetic procedures by a broader patient population. These trends have made non-surgical procedures the primary driver of growth in the aesthetic medicinemarket, accounting for 83.5% of the total number of procedures performed in 2013, according to the ASAPS annual statistics. Injectable botulinum toxin was the mostfrequently performed non-surgical procedure in 2013, with 3.8 million procedures in the US, a 16% increase over 2012.Injectable botulinum toxin treatments have almost doubled in the past ten years according to ASAPS annual statistics. Global Industry Analysts, Inc., or GIA, furtherestimates that in 2014, clinicians spent an estimated $1.3 billion globally on injectable botulinum toxin for aesthetic procedures, and such spending is expected to grow at acompounded annual growth rate of 10% from 2013 through 2020.The Opportunity for Botulinum Toxins for Therapeutic IndicationsWhile currently approved botulinum toxin products may be better known for their aesthetic applications, according to GIA, the fastest-growing segment of thebotulinum toxin market in the United States and Europe is actually for therapeutic indications. This growth has been driven largely by the approval of botulinum toxinproducts in new indications such as preventive treatment of migraine headache and upper limb spasticity in 2010, urinary incontinence in 2011, overactive bladder in 2013,and lower limb spasticity in 2016. Botulinum toxin’s ability to affect neuromuscular junctions, muscle activity or the release of neuropeptides, neurotransmitters andneuromediators in a controlled manner has enabled it to be developed and used in a wide range of therapeutic indications. Botulinum toxin products in their injectable formhave been approved for multiple therapeutic indications including:•hyperhidrosis;•chronic migraine headache;•urinary incontinence and overactive bladder;•movement disorders, such as cervical dystonia and upper and lower limb spasticity; and•uncontrolled blinking.In addition to these approved therapeutic indications, botulinum toxin products are being evaluated in clinical trials in multiple other therapeutic indications includingacne, rosacea, skin and wound healing, scar reduction, hair loss treatments, plantar fasciitis and several muscular-skeletal conditions.While botulinum toxin products have been very effective in the treatment of many conditions, there are limitations to the use of the currently approved products intheir injectable form. For example, in the case of hyperhidrosis, injectable botulinum toxin products require up to 30 injections in the underarms, an area that is particularlysensitive to pain, and a procedure that is reimbursed to physicians at a low rate relative to the time required to perform the procedure. As a result, the use of Botox ® , whichis the only injectable botulinum toxin product currently approved for hyperhidrosis, has been limited. In the case of chronic migraine headache, injectable botulinum toxinproducts require as many as 31 injections in different parts of the head12Table of Contentsand neck. Due to the pain associated with injections and other limitations associated with injectable botulinum toxin products, we believe that there is a significant need fora painless, topically administered and effective botulinum toxin.We also believe there is opportunity to improve injectable botulinum toxin use in neurological movement and other disorders. Muscle movement disorders areneurological conditions that affect a person’s ability to control muscle activity in one or more areas of the body. Muscle spasticity happens after the body’s nervous systemhas been damaged, most commonly by a stroke, disease, or trauma. Muscle spasticity can be painful and may have a significant effect on a person’s quality of life. Sometasks, like getting dressed or bathing, become difficult, and a person’s self-esteem may be affected by their abnormal posture. Common muscle movement disorders includecervical dystonia (excessive pulling of the muscles in the neck and shoulder), and upper or lower limb spasticity (stiffness in arm or leg muscles). Botulinum toxin type Ahas proven safe and effective for such uses, as the most common treatment for muscle movement disorders is to relax the muscle by injecting it with botulinum toxin.However, such injections must be repeated every 3-4 months and require large doses, typically more than 200 BOTOX® units each treatment. As a result of the discomfortassociated with muscle movement disorders and the associated demand for treatment that currently requires up to four visits per year, we believe that there is a significantneed for a longer-lasting and more targeted injectable botulinum toxin.Our StrategyOur objective is to be a leading provider of botulinum toxin products across multiple aesthetic and therapeutic indications in both topical and injectable dose formsand to expand the market for botulinum toxin products. To achieve this objective, we plan to develop and commercialize two proprietary, patent-protected productcandidates: RT002 injectable, our injectable botulinum toxin, and RT001 topical, our topical botulinum toxin.Key elements of our strategy are: •Advance RT002 Injectable Clinical Development. In the first half of 2016, we plan to complete the BELMONT Phase 2 active comparator against the marketleader, BOTOX® Cosmetic, for the treatment of glabellar lines and have an End of Phase 2 meeting with the FDA. Following the End of Phase 2 meetingwith the FDA, we plan to initiate a Phase 3 program in the second half of 2016. In muscle movement disorders, we plan to continue our Phase 2 trial for thetreatment of cervical dystonia.•Complete Development And Seek Regulatory Approval for RT001 Topical . We are in the advanced stages of our development process of RT001 topical forthe treatment of crow's feet. We expect to report results from the first of two U.S. Phase 3 pivotal clinical trials in the first half of 2016 and plan to initiateadditional Phase 3 pivotal clinical trials in the United States and Europe subsequently. We expect to file for regulatory approvals for the treatment of crow'sfeet in the United States and Europe. We chose to focus on these markets not only because of their size and growth potential but also because, in the UnitedStates and Europe, the market can be easily accessed by a specialty sales force.•Advance Future Therapeutic Indication for RT001 Topical . We expect to initiate a second Phase 2 clinical study using RT001 topical for the treatment ofaxillary hyperhidrosis in the second half of 2016. In the future, we expect to continue developing RT001 topical for therapeutic indications where injection-based botulinum toxin dose forms are poorly tolerated, or have higher risk of adverse events. We believe that the commercial potential of RT001 topical intherapeutic indications could be substantial given the number of indications that we could pursue and the significant advantages of a painless, topicalapproach.•Build Our Own Sales And Marketing Capabilities To Commercialize RT001 Topical and RT002 Injectable in North America. If RT001 topical is approved forthe treatment of crow's feet or RT002 injectable is approved for the treatment of glabellar lines by the FDA, we intend to build our own sales force andcommercial organization to launch in North America. Specifically, we plan to build a specialty sales force to target key physicians who perform the majorityof aesthetic procedures, including dermatologists, plastic surgeons, facial plastic surgeons, and oculo-plastic surgeons.•Expand The Global Market For Botulinum Toxin Products . We believe RT001 topical can expand the overall botulinum toxin market beyond the currentpatient base by bringing in new patients who would prefer a needle-free approach to treatment and a more tolerable procedure. RT001 topical's profile mayalso make it preferable for aesthetic indications where the risk of toxin spreading to adjacent muscles can cause undesired outcomes such as bruising, droopyeye and unwanted frozen face. We believe RT002 injectable also has the ability to expand the botulinum toxin market by appealing to patients who seek alonger lasting effect.•Establish Selective Strategic Partnerships To Maximize The Commercial Potential Of Our Product Candidates and TransMTS® Delivery TechnologyPlatform . Outside of North America, we plan to evaluate whether to13Table of Contentscommercialize our product candidates on our own or in collaboration with potential partners and distributors. Specifically, assuming regulatory approval ofRT001 topical and RT002 injectable outside of the United States, we will evaluate whether to build in-house commercial capabilities in one or more foreigncountries or to seek commercialization partners to maximize the profitability of RT001 topical and RT002 injectable. Additionally, the TransMTS® peptidedelivery technology platform can be used for molecules other than botulinum toxin. We plan on opportunistically partnering or licensing the technology todevelop this capability.•Maximize The Value Of Our Botulinum Toxin Cell Line And Manufacturing Assets . We have developed an integrated manufacturing, analytics, research anddevelopment facility that is capable of producing proprietary forms of botulinum toxin combined with TransMTS® peptide for Revance and any futurepartners.Manufacturing and OperationsWe have established capabilities for the production of botulinum toxin type A, including bulk drug substance and both topical and injectable finished drug product.Botulinum toxin is regulated as a Select Agent under authority of the Centers for Disease Control and Detection, or CDC, and as such requires that we perform ouroperations in compliance with CDC regulations. We are in good standing under our Select Agent license with the CDC. We have assembled a team of experiencedindividuals in the technical disciplines of chemistry, biology and engineering and have appropriately equipped laboratory space to support ongoing research anddevelopment efforts in our botulinum toxin product development platform. We have the ability to manufacture our own botulinum toxin to support our clinical trialprograms and eventually, our commercial production. We believe that having direct control over our manufacturing processes will enable us to develop additionalpharmaceutical product configurations effectively and with a competitive cost structure.We manufacture and perform testing for both bulk drug substance and finished dosage forms of drug product to support our RT001 topical and our RT002 injectableproduct candidates. The additional components required for our RT001 topical dose form, the peptide, diluent and delivery applicator, are all manufactured by third partiesunder contract with us. See the section entitled “Outsourced Components” below for additional information.Drug SubstanceThe manufacture of the drug substance for RT001 topical and RT002 injectable is based on microbial fermentation followed by product recovery and purificationsteps. The process is entirely free of animal and human-derived materials and depends on standard raw materials available commercially. The process is already scaled tosupport all future commercial demands. Bulk drug substance is stable when stored for extended periods, which allows us to establish reserves of drug substance and allowsperiodic drug substance production to replenish inventories as needed.Drug ProductManufacture of topical and injectable dose forms to support RT001 topical and RT002 injectable is currently performed at our pilot fill-finish facility and third-partymanufacturer. The manufacturing process consists of bulk compounding, liquid fill and freeze-drying to support acceptable shelf-life duration. We have constructed a largercapacity fill-finish line dedicated to RT001 topical that we plan to validate to support our regulatory license applications and future commercial demand. RT001 topicalbotulinum toxin and diluent has shown stability to date to support commercial launch. We plan to perform further scale-up of RT002 injectable drug product manufacturingto meet anticipated commercial demand.Outsourced ComponentsWe contract with third parties for the manufacture of the additional components required for RT001 topical dose form, which includes the manufacture of bulkpeptide through American Peptide Company, Inc., or American Peptide, diluent through Hospira Worldwide, Inc., or Hospira, and our delivery applicator through Duoject.American Peptide, Hospira, and Duoject have been or were recently acquired by Bachem, Pfizer, Inc., and Novocol Healthcare, Inc., respectively.Our agreement with List Biological Laboratories, Inc., or List Laboratories, a developer of botulinum toxin, includes certain milestone payments related to the clinicaldevelopment of our botulinum toxin products and the toxin manufacturing process. There is a royalty with an effective rate ranging from low-to-mid single-digitpercentages of future sales of botulinum toxin. Our agreement with List Laboratories will remain in effect until expiration of our royalty obligations and may be terminatedearlier on mutual agreement or because of a material breach by either party.14Table of ContentsOur agreement with Hospira includes product development services and manufacture and supply services and requires that we provide Hospira with advance forecastsof our product needs. This agreement also includes minimum purchase requirements once we have commercialized our products. Our agreement with Hospira will remainin effect for seven years, subject to extensions, after we commercialize our products and may be terminated earlier by either party following advance notice and good faithconsultation.Our agreement with Duoject includes development work and manufacture and supply services. This agreement also includes a royalty of less than one percent offuture sales of products which include the delivery applicator, in the event we do not use Duoject to manufacture the delivery applicator. Our agreement with Duoject willremain in effect until the later of April 30, 2020 or the expiration of the last patent issued to us for the delivery applicator and may be terminated earlier because of amaterial breach by either party.Our agreement with American Peptide includes development, manufacture and supply of peptide in accordance with certain specifications. This agreement alsoincludes certain quality control and inspection provisions through which we can ensure the satisfactory quality of our peptide. Our agreement with American Peptide willremain in effect until May 20, 2020 and may be terminated earlier by either party following advance notice or a material breach by either party.CompetitionWe expect to enter highly competitive pharmaceutical and medical device markets. Successful competitors in the pharmaceutical and medical device markets have theability to effectively discover, develop, test and obtain regulatory approvals for products, as well as the ability to effectively commercialize, market and promote approvedproducts, including communicating the effectiveness, safety and value of products to actual and prospective customers and medical staff. Numerous companies are engagedin the development, manufacture and marketing of healthcare products competitive with those that we are developing.Many of our competitors have substantially greater manufacturing, financial, research and development, personnel and marketing resources than we do. Ourcompetitors may also have more experience and expertise in obtaining marketing approvals from the FDA and other regulatory authorities. In addition to productdevelopment, testing, approval and promotion, other competitive factors in the pharmaceutical and medical device industries include industry consolidation, product qualityand price, product technology, reputation, customer service and access to technical information. As a result, our competitors may be able to develop competing or superiortechnologies and processes, and compete more aggressively and sustain that competition over a longer period of time than we could. Our technologies and products may berendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our competitors. As more companies developnew intellectual property in our markets, the possibility of a competitor acquiring patent or other rights that may limit our products or potential products increases, whichcould lead to litigation.Upon marketing approval, the first expected use of our products will be to treat crow’s feet, glabellar lines and other indications in aesthetic medicine, followed bypotential use to treat excessive sweating, cervical dystonia and other therapeutic conditions. The technologies with which we expect to compete directly are injectable andtopical neuromodulators, and to a lesser extent, dermal fillers.Injectable and Topical NeuromodulatorsOur primary competitors in the pharmaceutical market are companies offering injectable dose forms of botulinum toxin, including: •BOTOX ® and BOTOX Cosmetic®, marketed by Allergan, Inc., since its original approval by the FDA in 1989, has been approved for multiple indications,including glabellar lines, crow’s feet, hyperhidrosis, upper and lower limb spasticity, cervical dystonia, strabismus, blepharospasm, chronic migraine,incontinence, and overactive bladder. In November 2015, Pfizer Inc. and Allergan entered into a merger agreement set to close in 2016. This creates a leadingglobal pharmaceutical company with significant research, discovery, and delivery capabilities.•Myobloc ® , a neuromodulator currently marketed by US WorldMeds and approved by the FDA in 2000.•Dysport ® , an injectable botulinum toxin for the treatment of cervical dystonia, and glabellar lines and upper limb spasticity, which is marketed by Ipsen Ltd.,or Ipsen, and Galderma, a Nestle company. Galderma acquired rights to market the product in the United States and Canada from Valeant PharmaceuticalsInternational, Inc. in 2014. Dysport® was approved by the FDA in 2009. Ipsen had previously received marketing authorization for a cosmetic indication forDysport ® in Germany in 2006 and, in 2007, Ipsen granted Galderma an exclusive15Table of Contentsdevelopment and marketing license for Dysport ® for cosmetic indications in the European Union, Russia, Eastern Europe and the Middle East, and first rightsof negotiation for other countries around the world, except the United States, Canada and Japan. In 2008, Galderma became Ipsen’s sole distributor forDysport ® in Brazil, Argentina and Paraguay. In 2009, the health authorities of 15 European Union countries approved Dysport ® for glabellar lines under thetrade name Azzalure ® . In 2011, Ipsen and Syntaxin engaged in a research collaboration agreement to develop native and engineered formats of botulinumtoxin.•Xeomin ® , marketed by Merz Pharma, or Merz, and approved by the FDA in 2010 for cervical dystonia and blepharospasm in adults previously treated withBotox ® . In the third quarter of 2011, Xeomin ® was approved by the FDA and in Korea for glabellar lines. In the fourth quarter of 2015, Xeomin ® wasapproved by the FDA for the treatment of upper limb spasticity. Xeomin ® is also currently approved for therapeutic indications in most countries in theEuropean Union as well as Canada and certain countries in Latin America and Asia. Bocouture ® (rebranded from Xeomin ® ), marketed by Merz andreceived approval for glabellar lines in Germany in 2009. In 2010, Bocouture ® was approved in significant markets within the European Union. Xeomin ® isalso approved for glabellar lines in Argentina and Mexico.We are aware of competing neuromodulators currently being developed and commercialized in Asia, South America and other markets. These lightly regulatedmarkets may not require adherence to the FDA’s cGMPs or the regulatory requirements of the European Medicines Agency or other regulatory agencies in countries thatare members of the Organization for Economic Cooperation and Development. While these products are unlikely to meet stringent U.S. regulatory standards, the companiesoperating in these markets may be able to produce products at a lower cost than United States and European manufacturers. In addition to the injectable botulinum toxindose forms, we are aware that other companies are developing topical neuromodulators for cosmetic and therapeutics indications and are conducting clinical trials for acneand facial aesthetic and hyperhidrosis.Aesthetic MedicineWe anticipate that the first use of our products will be in the professional facial aesthetic medicine market, which includes neurotoxins and dermal fillers, as well aspolymer-based injectables. These and other products experience indirect competition from procedures, such as laser treatments, face lifts, chemical peels, fat injections andcold therapy. In the United States, dermal filler products, including Allergan’s Juvéderm family of fillers including Juvéderm VoLUMA ® XC, compete with Galderma’sproducts Restylane ® and Perlane™. In 2010, the FDA approved Allergan’s Juvéderm ® Ultra XC and Ultra Plus XC products containing lidocaine as well as newformulations of Galderma's Restylane ® and Perlane™, also containing lidocaine and Restylane ® without lidocaine for lips. Additional competitors in the filler categoryinclude Radiesse ® , a calcium hydroxylapatite from BioForm, which was acquired by Merz in 2010, Sculptra ® from Galderma, and Belotero Balance ® from Merz.Internationally, competitive products include Q-Med’s range of Restylane ® and Perlane™ products, as well as products from Anteis, Filoraga, Teoxane, Galderma and alarge number of other hyaluronic acid, bioceramic, protein and other polymer-based dermal fillers.Sales and MarketingWe currently have limited marketing capabilities and no sales organization. Assuming successful completion of clinical trials and receipt of marketing approval forRT001 topical for treatment of crow’s feet or for RT002 injectable for treatment of glabellar lines by the FDA, we plan to launch in North America with our own sales forceand commercial organization. Specifically, we would access the North American market through a focused, specialized sales force that targets the core physicians(dermatologists, plastic surgeons, facial plastic surgeons and oculo-plastic surgeons) who perform the majority of the cosmetic procedures. Assuming approval to market inthe United States, we will focus our initial marketing of RT001 topical and RT002 injectable on these core specialties.After European approval to market, we anticipate marketing RT001 topical and RT002 injectable through either our own commercial infrastructure or a combinationof our own infrastructure and that of our possible future partners. For future uses of RT001 topical and RT002 injectable outside of aesthetic medicine, we are evaluatinglaunching on our own or through partner relationships.Strategic PartneringWe plan to focus our efforts on developing and commercializing RT001 topical and RT002 injectable in North America. We intend to market on our own and seekcollaborative relationships outside of North America to maximize the commercial potential of our product candidates and delivery technology.16Table of ContentsWe also plan to leverage our TransMTS ® technology platform outside of our core focus in botulinum toxin by partnering with other companies. For example, in June2013 we entered into an exclusive technology evaluation agreement with the Procter & Gamble Company to co-develop a peptide and explore applications of the TransMTS® delivery technology in two classes of over-the-counter cosmetic compounds. If successful, this partnership would enable us to receive royalty revenue.Intellectual PropertyOur success depends in large part on our ability to obtain and maintain intellectual property protection for our drug candidates, novel biological discoveries, and drugdevelopment technology and other know-how, to operate without infringing on the proprietary or intellectual property rights of others and to prevent others from infringingour proprietary and intellectual property rights. We seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related toour proprietary technology, inventions and improvements that are important to the development and implementation of our business. We also rely on know-how, copyright,trademarks and trade secret laws, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position. Suchprotection is also maintained using confidential disclosure agreements. Protection of our technologies is important for us to offer our customers proprietary services andproducts unavailable from our competitors, and to exclude our competitors from practicing technology that we have developed. If competitors in our industry have access tothe same technology, our competitive position may be adversely affected.It is possible that our current patents, or patents which we may later acquire, may be successfully challenged or invalidated in whole or in part. It is also possible thatwe may not obtain issued patents from our pending patent applications or other inventions we seek to protect. Due to uncertainties inherent in prosecuting patentapplications, sometimes patent applications are rejected and we subsequently abandon them. It is also possible that we may develop proprietary products or technologies inthe future that are not patentable or that the patents of others will limit or altogether preclude our ability to do business. In addition, any patent issued to us may provide uswith little or no competitive advantage, in which case we may abandon such patent or license it to another entity. For more information, please see “Item 1A. Risk Factors— Risks Related to our Intellectual Property.”As of February 25, 2016, we held approximately 125 issued patents and approximately 138 pending patent applications, including foreign counterparts of U.S. patentsand applications. Eleven of our patents are issued in the United States, with the rest issued in Australia, Canada, China, various countries in Europe, Hong Kong, Israel,Japan, Malaysia, Mexico, New Zealand, Singapore and South Africa. In addition, we have pending patent applications in the United States as well as in Australia, Brazil,Canada, China, Europe, Hong Kong, Israel, India, Japan, Korea, Mexico, and Singapore. The earliest that any of our patents will expire is July 20, 2021 for U.S. Patent No.7,807,780. Because approval for RT001 topical is still pending before the FDA, one of these patents, or a later granted Revance patent, may be eligible for a patent termextension of up to five years, provided the total period of market exclusivity based on the extended patent does not exceed 14 years. For more information, please see“Business - Government Regulation - U.S. Patent Term Restoration and Marketing Exclusivity.”We will continue to pursue additional patent protection as well as take appropriate measures to obtain and maintain proprietary protection for our innovativetechnologies.Our registered and pending U.S. trademarks include REVANCE ® , TRANSMTS ® , MOTISTE, XOTIKIS and JANTYNG.Government RegulationProduct Approval Process in the United StatesIn the United States, the FDA regulates drugs and biologic products under the Federal Food, Drug and Cosmetic Act, or FDCA, its implementing regulations, andother laws, including, in the case of biologics, the Public Health Service Act. Our product candidates, RT001 topical and RT002 injectable, are subject to regulation by theFDA as a biologic. Biologics require the submission of a BLA to the FDA and approval of the BLA by the FDA before marketing in the United States.The process of obtaining regulatory approvals for commercial sale and distribution and the subsequent compliance with applicable federal, state, local and foreignstatutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U. S. requirements at any time during theproduct development process, approval process or after approval, may subject an applicant to administrative or judicial civil or criminal sanctions. These sanctions couldinclude the FDA’s refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold on clinical trials,warning letters, product recalls, product seizures, total or partial17Table of Contentssuspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. The process requiredby the FDA before a biologic may be marketed in the United States generally involves the following: •completion of preclinical laboratory tests, animal studies and formulation studies performed in accordance with the FDA’s current good laboratory practices,or GLP, regulations;•submission to the FDA of an IND which must become effective before human clinical trials in the United States may begin;•approval by an institutional review board, or IRB, at each clinical trial site before each trial may be initiated;•performance of adequate and well-controlled human clinical trials in accordance with the FDA’s current good clinical practices, or GCP, regulations toestablish the safety and efficacy of the product candidate for its intended use;•submission to the FDA of a BLA;•satisfactory completion of an FDA inspection, if the FDA deems it as a requirement, of the manufacturing facility or facilities where the product is producedto assess compliance with the FDA’s current good manufacturing practice standards, or cGMP, regulations to assure that the facilities, methods and controlsare adequate to preserve the product’s identity, strength, quality and purity, as well as compliance with applicable Quality System Regulations, or QSR, fordevices;•potential audits by the FDA of the nonclinical and clinical trial sites that generated the data in support of the BLA;•potential review of the BLA by an external advisory committee to the FDA, whose recommendations are not binding on the FDA; and•FDA review and approval of the BLA prior to any commercial marketing or sale.Preclinical StudiesBefore testing any compounds with potential therapeutic value in humans, the product candidate enters the preclinical testing stage. Preclinical tests includelaboratory evaluations of product chemistry, stability and formulation, as well as animal studies to assess the potential toxicity and activity of the product candidate. Theconduct of the preclinical tests must comply with federal regulations and requirements including GLPs. The sponsor must submit the results of the preclinical tests, togetherwith manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. The INDautomatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions about the conduct of the clinical trial, including concernsthat human research subjects will be exposed to unreasonable health risks. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before theclinical trial can begin. The FDA may also impose clinical holds on a product candidate at any time before or during clinical trials due to safety concerns or non-compliance, or for other reasons.Clinical TrialsClinical trials involve the administration of the product candidate to human patients under the supervision of qualified investigators, generally physicians notemployed by or under the clinical trial sponsor’s control. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial,dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety and effectiveness. Each protocol must be submitted to theFDA as part of the IND. Clinical trials must be conducted in accordance with GCPs. Further, each clinical trial must be reviewed and approved by an IRB at or servicingeach institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of clinical trial participants and considers such itemsas whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the form andcontent of the informed consent that must be signed by each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. Humanclinical trials are typically conducted in three sequential phases that may overlap or be combined: •Phase 1. The product candidate is initially introduced into a limited population of healthy human subjects and tested for safety, dosage tolerance, absorption,metabolism, distribution and excretion. In the case of some products for some diseases, or when the product may be too inherently toxic to ethicallyadminister to healthy volunteers, the initial human testing is often conducted in patients with the disease or condition for which the product candidate isintended to gain an early indication of its effectiveness.18Table of Contents•Phase 2. The product candidate is evaluated in a limited patient population, but larger than in Phase 1, to identify possible adverse events and safety risks, topreliminarily evaluate the efficacy of the product for specific targeted indications and to assess dosage tolerance, optimal dosage and dosing schedule.•Phase 3. Clinical trials are undertaken to further evaluate dosage, and provide substantial evidence of clinical efficacy and safety in an expanded patientpopulation, such as several hundred to several thousand, at geographically dispersed clinical trial sites. Phase 3 clinical trials are typically conducted whenPhase 2 clinical trials demonstrate that a dose range of the product candidate is effective and has an acceptable safety profile. These trials typically have atleast 2 groups of patients who, in a blinded fashion, receive either the product or a placebo. Phase 3 clinical trials are intended to establish the overallrisk/benefit ratio of the product and provide an adequate basis for product labeling. Generally, two adequate and well-controlled Phase 3 clinical trials arerequired by the FDA for approval of a BLA.IND sponsors may dispute FDA decisions concerning clinical development. For example, we engaged in the Formal Dispute Resolution process with the FDA for theproposed indication, primary endpoint assessment and primary endpoint measurement of RT001 topical for crow’s feet. In May 2012, we received a determination that theEnd-of-Phase 2 had been reached for the indication of lateral canthal lines.Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are used to gain additionalexperience from the treatment of patients in the intended therapeutic indication to further assess the biologic’s safety and effectiveness after BLA approval. Phase 4 trialscan be initiated by the drug sponsor or as a condition of BLA approval by the FDA.Annual progress reports detailing the results of the clinical trials must be submitted to the FDA and written IND safety reports must be promptly submitted to theFDA and the investigators for serious and unexpected adverse events or any finding from tests in laboratory animals that suggests a significant risk for human subjects.Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physicalcharacteristics of the biologic and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturingprocess must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength,quality and purity of the final biologic product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate thatthe product candidate does not undergo unacceptable deterioration over its shelf life.U.S. Review and Approval ProcessesThe results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests, proposed labeling andother relevant information are submitted to the FDA in the form of a BLA requesting approval to market the product for one or more specified indications. The submissionof a BLA is subject to the payment of substantial user fees.Once the FDA receives a BLA, it has 60 days to review the BLA to determine if it is substantially complete and the data are readable, before it accepts the BLA forfiling. Once the submission is accepted for filing, the FDA begins an in-depth review of the BLA. Under the goals and policies agreed to by the FDA under the PrescriptionDrug User Fee Act, or PDUFA, the FDA has twelve months from submission in which to complete its initial review of a standard BLA and make a decision on theapplication, and eight months from submission for a priority BLA, and such deadline is referred to as the PDUFA date. The FDA does not always meet its PDUFA dates foreither standard or priority BLAs. The review process and the PDUFA date may be extended by three months if the FDA requests or the BLA sponsor otherwise providesadditional information or clarification regarding information already provided in the submission within the last three months before the PDUFA date.After the BLA submission is accepted for filing, the FDA reviews the BLA to determine, among other things, whether the proposed product is safe and effective forits intended use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality and purity. TheFDA may refer applications for novel drug or biological products or drug or biological products which present difficult questions of safety or efficacy to an advisorycommittee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved andunder what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.During the approval process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategies, or REMS, is necessary to assure the safe use of the product.If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS; the FDA will not19Table of Contentsapprove the BLA without an approved REMS, if required. A REMS can substantially increase the costs of obtaining approval and limit commercial opportunity.Before approving a BLA, the FDA can inspect the facilities at which the product is manufactured. The FDA will not approve the BLA unless it determines that themanufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within requiredspecifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliancewith GCP requirements. If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies inthe submission and often will request additional clinical testing or information before a BLA can be approved.The FDA will issue a complete response letter if the agency decides not to approve the BLA. The complete response letter describes all of the specific deficiencies inthe BLA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinicaltrials. Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If acomplete response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application.If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise belimited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in theproduct labeling. In addition, the FDA may require post marketing studies, sometimes referred to as Phase 4 testing, which involves clinical trials designed to further assessdrug safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. After approval,certain changes to the approved biologic, such as adding new indications, manufacturing changes or additional labeling claims, are subject to further FDA review andapproval. Depending on the nature of the change proposed, a BLA supplement must be filed and approved before the change may be implemented. For many proposed post-approval changes to a BLA, the FDA has up to 180 days to review the application. As with new BLAs, the review process is often significantly extended by the FDArequests for additional information or clarification.Post-Approval RequirementsAny biologic products for which we or our collaborators receive FDA approvals are subject to continuing regulation by the FDA, including, among other things,record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling anddistribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements, whichinclude, among others, restrictions on direct-to-consumer advertising, promoting biologics for uses or in patient populations that are not described in the product’s approvedlabeling, known as “off-label use,” industry-sponsored scientific and educational activities, and promotional activities involving the internet. The FDA closely regulates thepost-approval marketing and promotion of biologics, and although physicians may prescribe legally available drugs for off-label uses, manufacturers may not market orpromote such off-label uses. Failure to comply with these or other FDA requirements can subject a manufacturer to possible legal or regulatory action, such as warningletters, suspension of manufacturing, seizure of product, injunctive action, mandated corrective advertising or communications with healthcare professionals, possible civilor criminal penalties or other negative consequences, including adverse publicity.We currently manufacture clinical drug supplies using a combination of third-party manufacturers and our own manufacturing facility in order to support both of ourproduct candidates and plan to do so on a commercial scale if our product candidates are approved. We contract with third-party manufacturers for certain componentsnecessary to produce RT001 topical in clinical quantities and expect to continue to do so to support commercial scale production if RT001 topical is approved. Our futurecollaborators may also utilize third parties for some or all of a product we are developing with such collaborator. We and our third-party manufacturers are required tocomply with applicable FDA manufacturing requirements contained in the FDA’s cGMP regulations. cGMP regulations require among other things, quality control andquality assurance as well as the corresponding maintenance of records and documentation. Drug manufacturers and other entities involved in the manufacture anddistribution of approved biologics are required to register their establishments with the FDA and certain state agencies, and are subject to periodic inspections by the FDAand certain state agencies for compliance with cGMP and other laws. Accordingly, manufacturers must continue to expend time, money, and effort in the area of productionand quality control to maintain cGMP compliance.U.S. Patent Term Restoration and Marketing Exclusivity20Table of ContentsDepending upon the timing, duration and specifics of the FDA approval of our biologic product candidate, some of our U.S. patents may be eligible for limited patentterm extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-WaxmanAmendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process.However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restorationperiod is generally one-half the time between the effective date of an IND and the submission date of a BLA plus the time between the submission date of a BLA and theapproval of that application. Only one patent applicable to an approved product is eligible for the extension and the application for the extension must be submitted prior tothe expiration of the patent. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension orrestoration. In the future, we may intend to apply for restoration of patent term for one of our currently owned or licensed patents to add patent life beyond its currentexpiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA.Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications of other companies seeking to reference anothercompany’s BLA. Specifically, the Biologics Price Competition and Innovation Act of 2009, or BPCIA, established an abbreviated pathway for the approval of biosimilarand interchangeable biological products. Under the BPCIA, an application for a biosimilar product cannot be approved by the FDA until twelve years after the originalbranded product was approved under a BLA. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringementto one of the patents listed with the FDA by the innovator BLA holder. The BPCIA is complex and subject to interpretation as it is presently being implemented.Product Approval Process Outside the United StatesIn addition to regulations in the United States, we will be subject to a variety of foreign regulations governing manufacturing, clinical trials, commercial sales anddistribution of our future products. Whether or not we obtain FDA approval for a product candidate, we must obtain approval of the product by the comparable regulatoryauthorities of foreign countries before commencing clinical trials or marketing in those countries. The approval process varies from country to country, and the time may belonger or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatlyfrom country to country.Under European Union regulatory systems, marketing authorizations may be submitted either under a centralized, decentralized or mutual recognition procedure. Thecentralized procedure provides for the grant of a single marketing authorization that is valid for all European Union member states. The decentralized procedure includesselecting one “reference member state,” or RMS, and submitting to more than one member state at the same time. The RMS National Competent Authority conducts adetailed review and prepares an assessment report, to which concerned member states provide comment. The mutual recognition procedure provides for mutual recognitionof national approval decisions. Under this procedure, the holder of a national marketing authorization may submit an application to the remaining member states post-initialapproval. Within 90 days of receiving the applications and assessment report, each member state must decide whether to recognize approval.Federal and State Fraud and Abuse and Data Privacy and Security Laws and RegulationsIn addition to FDA restrictions on marketing of pharmaceutical products, federal and state fraud and abuse laws restrict certain business practices in the biotechnologyindustry. These laws include anti-kickback and false claims statutes. We will be subject to these laws and regulations once we begin to directly commercialize our products.The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in returnfor, purchasing, leasing, ordering or arranging for the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcareprograms. The term “remuneration” has been broadly interpreted to include anything of value, including for example, gifts, discounts, the furnishing of supplies orequipment, credit arrangements, payments of cash, waivers of payment, ownership interests and providing anything at less than its fair market value. The Anti-KickbackStatute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand prescribers, purchasers and formulary managers on the other.Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harborsare drawn narrowly, and our practices may not in all cases meet all of the criteria for statutory exemptions or safe harbor protection. Practices that involve remuneration thatmay be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exemption or safe harbor.Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to21Table of Contentsinduce referrals of federal healthcare covered business, the statute has been violated. The reach of the Anti-Kickback Statute was also broadened by the Patient Protectionand Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, which, among other things, amends the intentrequirement of the federal Anti-Kickback Statute. Pursuant to the statutory amendment, a person or entity no longer needs to have actual knowledge of this statute orspecific intent to violate it in order to have committed a violation. In addition, the ACA provides that the government may assert that a claim including items or servicesresulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act or the civil monetarypenalties statute, which imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health program that theperson knows or should know is for an item or service that was not provided as claimed or is false or fraudulent. The federal transparency requirements under ACA requirecertain manufacturers of drugs, devices, biologics and medical supplies to annually report to the Department of Health and Human Services information related to paymentsand other transfers of value to physicians and teaching hospitals and physician ownership and investment interests.The federal False Claims Act prohibits any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government orknowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. Pharmaceutical andother healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would billfederal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product forunapproved, and thus non-reimbursable, uses. Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed underMedicaid and other state programs, or, in several states, apply regardless of the payor.In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business. The HealthInsurance Portability and Accountability Act, or HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and its implementingregulations, imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECHmakes HIPAA’s privacy and security standards directly applicable to “business associates,” those independent contractors or agents of covered entities that receive or obtainprotected health information in connection with providing a service on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may beimposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages orinjunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, state lawsgovern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect,thus complicating compliance efforts.Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our business activities now and inthe future could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the federal and state laws described above orany other governmental regulations that apply to us, we may be subject to penalties, including criminal and significant civil monetary penalties, damages, fines,imprisonment, exclusion of products from reimbursement under government programs and the curtailment or restructuring of our operations, any of which could adverselyaffect our ability to operate our business and our results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to similarforeign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws andimplementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.Environment, Health and SafetyWe are voluntarily assessing and publicly reporting our greenhouse gas emissions and water usage, and have begun to take action to reduce such emissions and usage.For example we have established employee commuter programs, evaluated the energy efficiency of our buildings and installed low-flow water fixtures. Various laws andregulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. For example, the California AirResources Board is in the process of drafting regulations to meet state emissions targets. Based on current information and subject to the finalization of the proposedregulations, we believe that our primary risk related to climate change is the risk of increased energy costs. However, because we are not an energy-intensive business, wedo not anticipate being subject to a cap and trade system or any other mitigation measures that would likely be material to our capital expenditures, results of operations orcompetitive position.22Table of ContentsWe are also subject to other federal, state and local regulations regarding workplace safety and protection of the environment. We use hazardous materials, chemicals,viruses and various radioactive compounds in our research and development activities and cannot eliminate the risk of accidental contamination or injury from thesematerials. Certain misuse or accidents involving these materials could lead to significant litigation, fines and penalties. We have implemented proactive programs to reduceand minimize the risk of hazardous materials incidents.Research and DevelopmentConducting research and development is central to our business model. We have invested and expect to continue to invest significant time and capital in our researchand development operations. Our research and development expenses were $47.5 million, $33.4 million, and $27.8 million during the years ended December 31, 2015,2014, and 2013, respectively. We plan to increase our research and development expenses for the foreseeable future to initiate and complete clinical trials and otherassociated programs relating to RT001 topical for the treatment of crow’s feet and therapeutic indications such as hyperhidrosis, and to initiate and complete additionalclinical trials and associated programs related to RT002 injectable for the treatment of glabellar lines and therapeutic indications in areas such as muscle movementdisorders.EmployeesAs of December 31, 2015 , we had 103 full-time employees. Of these employees, 82 employees were engaged in research and development and 21 employees wereengaged in finance, marketing, human resources, facilities, information technology, general management, and administrative activities. We plan to continue to expand ourresearch and development activities. To support this growth, we will need to expand managerial, research and development, operations, commercial, finance and otherfunctions. None of our employees are represented by a labor union, and we consider our employee relations to be good.Other InformationWe were incorporated in Delaware on August 10, 1999 under the name Essentia Biosystems, Inc. We commenced operations in June 2002 and, in April 2005,changed our name to Revance Therapeutics, Inc. Our principal executive offices are located at 7555 Gateway Boulevard, Newark, California 94560, and our telephonenumber is (510) 742-3400. Our website address is http://www.revance.com. The information contained in, or that can be accessed through, our website is not part of thisForm 10-K.We file electronically with the SEC, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reportsfiled or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act . We make available on our website at www.revance.com (under “Investors - Financials &Filings”), free of charge, copies of these reports as soon as reasonably practicable after filing these reports with, or furnishing them to, the SEC.We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will remain an emerging growthcompany until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of our initial public offering in February 2014, (b) in which we have totalannual gross revenue of at least $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, and (2) the date on which we have issued more than $1.0 billion innon-convertible debt during the prior three-year period. References herein to "emerging growth company" shall have the meaning associated with it in the JOBS Act.23Table of ContentsITEM 1A.RISK FACTORSInvesting in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as all other information included in thisForm 10-K, including our Consolidated Financial Statements, the notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Conditionand Results of Operations,” before you decide to purchase shares of our common stock. If any of the following risks actually occurs, our business, prospects, financialcondition and operating results could be materially harmed. As a result, the trading price of our common stock could decline and you could lose all or part of yourinvestment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and stock price.Risks Related to Our Business and StrategyWe are substantially dependent on the clinical and commercial success of our topical product candidate RT001 topical and our injectable product candidateRT002 injectable.To date, we have invested substantial efforts and financial resources in the research and development of RT001 topical, our topical formulation of botulinum toxin.We are in a Phase 3 development program for RT001 topical for the treatment of crow's feet. In October 2014, we initiated an open-label study designed to confirmsuccessful transfer of the production of our RT001 topical drug product to our manufacturing facility. Following a comprehensive analysis of the data obtained in suchstudy, we subsequently commenced and completed a second open-label study using RT001 topical in the first half of 2015. Following analysis of the data obtained fromthese open-label studies, taken together with our analysis of prior studies and early data from newly developed clinical methods, we decided to proceed with a RT001topical U.S. pivotal Phase 3 clinical trial for the treatment of crow's feet, which commenced during the third quarter of 2015. To date, we have conducted 17 clinical trialsfor RT001 topical, with a total of over 1,600 subjects, for the treatment of crow's feet. In September 2015, we initiated an additional randomized, double-blinded, dose-ranging, placebo-controlled Phase 2 clinical trial designed to evaluate the safety and efficacy of a single, bilateral application of RT001 topical for the treatment of primaryaxillary hyperhidrosis. This trial evaluated efficacy of two different doses of RT001 as compared to placebo. In December 2015, we reported positive interim results and,although the trial sample size was not chosen to meet statistical significance, using quantitative gravimetric measurements, the data was positive and showed that a singletreatment of RT001 topical gel achieved clinically meaningful efficacy at Week 4. On the primary quantitative assessment of average reduction from baseline ingravimetrically-measured sweat production at Week 4, the results ranged from 214.2 mg to 165.7 mg (p=0.003 for the higher dose) per five minutes for RT001, comparedto 66.3 mg per five minutes in patients who received placebo. These ranges corresponded to 81.1% to 79.6% change for RT001, compared to 54.6% for placebo. On theprimary qualitative efficacy assessment of a 2-point or greater responders from baseline using the Hyperhidrosis Disease Severity Scale, or HDSS, at Weeks 1 and 2 theresults ranged from a 23.8% to 13.3% improvement for RT001, compared to 11.8% at Week 1 and 17.6% at Week 2 for placebo. By Week 4, there was a 14.3% to 13.3%improvement for RT001, compared to a 29.4% improvement in patients who received placebo. The clinical study indicated that RT001 topical appeared to be well-toleratedwith no serious adverse events related to the study drug or study treatment procedures or other safety concerns. We plan to advance RT001 topical into a larger Phase 2study for the treatment of hyperhidrosis in 2016, which will be designed to confirm a final dose. Upon successful completion of this study, we plan to meet with the FDA todiscuss moving forward into Phase 3 studies.We have also invested substantial efforts and financial resources in the research and development of an injectable form of botulinum toxin, RT002 injectable. Basedupon the results to date, we are further developing RT002 injectable for the treatment of glabellar lines and reported interim results from BELMONT, a Phase 2 activecomparator clinical trial against the market leader BOTOX® Cosmetic. The topline interim data from the trial showed that RT002 injectable achieved its primary efficacymeasurement at four weeks for all doses of RT002 injectable and that such efficacy was highly statistically significant as compared to placebo. In addition, RT002injectable demonstrated a 23.6-week median duration versus BOTOX® Cosmetic with an 18.8-week median duration. Across all cohorts, RT002 injectable appeared to begenerally safe and well-tolerated. Final results may differ from interim results. We plan to conduct an End-of-Phase 2 meeting with the FDA in the first half of 2016. Wethen expect to begin Phase 3 clinical studies of RT002 injectable for the treatment of glabellar lines in the second half of 2016.We continue to explore therapeutic indications for muscle movement disorders such as cervical dystonia. In September 2015, we initiated a Phase 2 dose-escalating,open-label clinical study of RT002 for the treatment of cervical dystonia. The Phase 2 study is evaluating the safety, preliminary efficacy, and duration of effect of RT002injectable in subjects with moderate-to-severe isolated cervical dystonia. We completed enrollment in the first cohort and expect to release interim results in 2016.24Table of ContentsOur near-term prospects, including our ability to finance our company and generate revenue, will depend heavily on the successful development, regulatory approvaland commercialization of RT001 topical and RT002 injectable, as well as any future product candidates. The clinical and commercial success of our product candidates willdepend on a number of factors, including the following: •timely completion of, or need to conduct additional, clinical trials, including our clinical trials for RT001 topical, RT002 injectable and any future productcandidates, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the number and design of suchtrials and the accurate and satisfactory performance of third-party contractors;•our ability to demonstrate the effectiveness and duration of effect of our products on a consistent basis as compared to existing or future therapies;•our ability to demonstrate to the satisfaction of the FDA, the safety and efficacy of RT001 topical, RT002 injectable or any future product candidates throughclinical trials;•whether we are required by the FDA or other similar foreign regulatory agencies to conduct additional clinical trials to support the approval of RT001 topical,RT002 injectable or any future product candidates;•the acceptance of parameters for regulatory approval, including our proposed indication, primary endpoint assessment and primary endpoint measurementrelating to our lead indications of RT001 topical;•our success in educating physicians and patients about the benefits, administration and use of RT001 topical, RT002 injectable or any future productcandidates, if approved;•the prevalence and severity of adverse events experienced with our product candidates or future approved products;•the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;•the ability to raise additional capital on acceptable terms and in the time frames necessary to achieve our goals;•achieving and maintaining compliance with all regulatory requirements applicable to RT001 topical, RT002 injectable or any future product candidates orapproved products;•the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments;•the effectiveness of our own or our future potential strategic collaborators’ marketing, sales and distribution strategy and operations;•our ability to manufacture clinical trial supplies of RT001 topical, RT002 injectable or any future product candidates and to develop, validate and maintain acommercially viable manufacturing process that is compliant with current good manufacturing practices, or cGMP;•our ability to successfully commercialize RT001 topical, RT002 injectable or any future product candidates, if approved for marketing and sale, whether aloneor in collaboration with others;•our ability to enforce our intellectual property rights in and to RT001 topical, RT002 injectable or any future product candidates;•our ability to avoid third-party patent interference or intellectual property infringement claims;•acceptance of RT001 topical, RT002 injectable or any future product candidates, if approved, as safe and effective by patients and the medical community;and•the continued acceptable safety profile of RT001 topical, RT002 injectable or any future product candidates following approval.If we do not achieve one or more of these factors, many of which are beyond our control, in a timely manner or at all, we could experience significant delays or aninability to successfully commercialize our product candidates. Accordingly, we cannot assure you that we will be able to generate sufficient revenue through the sale ofRT001 topical, RT002 injectable or any future product candidate to continue our business.25Table of ContentsWe may be unable to obtain regulatory approval for RT001 topical, RT002 injectable or future product candidates under applicable regulatory requirements.The denial or delay of any such approval would delay commercialization and have a material adverse effect on our potential to generate revenue, our business andour results of operations.To gain approval to market a biologic product such as RT001 topical and RT002 injectable, we must provide the FDA and foreign regulatory authorities with data thatadequately demonstrate the safety, purity and potency of the product for the intended indication applied for in a Biologics License Application, or BLA, or other respectiveregulatory filings. The development of biologic products is a long, expensive and uncertain process, and delay or failure can occur at any stage of any of our clinical trials.A number of companies in the pharmaceutical industry, including biotechnology companies, have suffered significant setbacks in clinical trials, including in Phase 3development, even after promising results in earlier preclinical studies or clinical trials. These setbacks have been caused by, among other things, findings made whileclinical trials were underway and safety or efficacy observations made in clinical trials, including previously unreported adverse events. Success in preclinical testing andearly clinical trials does not ensure that later clinical trials will be successful, and the results of clinical trials by other parties may not be indicative of the results in trials wemay conduct. In particular, we have conducted two Phase 2b controlled clinical trials of RT001 topical, in which RT001 topical met the primary efficacy and all secondaryendpoints. We have also conducted one open-label, Phase 2b safety trial, which demonstrated that sequential applications of RT001 topical appear to be safe and well-tolerated, even at an accelerated frequency. However, we have conducted one Phase 3 clinical efficacy trial using a modified diluent formulation, the results of which wereinconsistent with our previous Phase 2b clinical trials and which did not show improvement from baseline in either the placebo or RT001 topical group. In October 2014,we conducted an open-label clinical trial of our RT001 topical drug product. The safety analysis from the 43 subjects enrolled in the open-label trial indicated that RT001topical appeared to be well-tolerated. The efficacy analysis showed clinically meaningful efficacy measured by the one-point investigator’s global assessment, or IGA, andthe one-point patient severity assessment, or PSA, as well as in the aggregate for the composite one-point assessment. The two-point response rates for the individual IGAand composite IGA and PSA assessments, however, did not meet the endpoints for the subjects enrolled in the trial. Following a comprehensive analysis of the dataobtained in this trial, we determined that the preliminary composite results were not adequate to move forward with our Phase 3 pivotal trial at such time.In the first half of 2015, we then commenced and completed an additional open-label clinical trial using RT001 topical. We designed this study to evaluate theattributes of different RT001 topical drug products aimed at improving the interaction between our peptide and toxin. The safety analysis from the 69 subjects enrolled inthis study indicated that RT001 topical appeared to be well-tolerated. The efficacy analysis for two of the RT001 topical drug products evaluated in this open-label trialshowed clinically meaningful efficacy measured by the one-point IGA and the one-point PSA as well as in the aggregate for the composite one-point assessment. In thesame two RT001 topical drug products evaluated, we observed some two-point composite response but given the small number of subjects enrolled in this trial, the patientresponse and other results observed are not necessarily predictive of future clinical trial results. Following analysis of the data available from these open-label studies, takentogether with our analysis of prior studies and early data from newly developed clinical methods, we decided to proceed with a RT001 topical U.S. Phase 3 clinical trial forthe treatment of crow's feet using a drug product that incorporates attributes of the drug products evaluated in the 2015 open-label trial.If this RT001 topical drug product, Phase 3 clinical trial or any of our clinical trials do not demonstrate the safety and efficacy to our satisfaction, or to the satisfactionof the FDA, we may be required to conduct additional clinical trials and the timing and our ability to obtain regulatory approval for RT001 topical could be materially andadversely affected.RT001 topical is currently in Phase 3 development and RT002 injectable is in Phase 2 development. Our business currently depends substantially on their successfuldevelopment, regulatory approval and commercialization. We currently have no drug or biologic products approved for sale, and we may never obtain regulatory approvalto commercialize RT001 topical or RT002 injectable. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of drug and biologicproducts are subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, and such regulations differ from country tocountry. We are not permitted to market RT001 topical or RT002 injectable in the United States until we receive approval of a BLA from the FDA. We are also notpermitted to market RT001 topical or RT002 injectable in any foreign countries until we receive the requisite approval from the regulatory authorities of such countries.The FDA or any foreign regulatory bodies can delay, limit or deny approval of our product candidates, including RT001 topical and RT002 injectable, for manyreasons, including: •our inability to demonstrate to the satisfaction of the FDA or the applicable foreign regulatory body that RT001 topical, RT002 injectable or any futureproduct candidates are safe and effective for the requested indication;•the FDA’s or the applicable foreign regulatory agency’s disagreement with our trial protocol or the interpretation of data from preclinical studies or clinicaltrials;26Table of Contents•our inability to demonstrate that clinical and other benefits of RT001 topical, RT002 injectable or any future product candidates outweigh any safety or otherperceived risks;•the FDA’s or the applicable foreign regulatory agency’s requirement for additional preclinical or clinical studies;•the FDA’s or the applicable foreign regulatory agency’s non-approval of the formulation, labeling or the specifications of RT001 topical, RT002 injectable orany future product candidates;•the FDA’s or the applicable foreign regulatory agency’s failure to approve our manufacturing processes or facilities, or the manufacturing processes orfacilities of third-party manufacturers with which we contract; or•the potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering ourclinical data insufficient for approval.Of the large number of drugs, including biologics, in development, only a small percentage successfully complete the FDA or other regulatory approval processes andare commercialized. We are not conducting and do not plan to conduct our U.S. Phase 3 clinical trials for RT001 topical under a Special Protocol Assessment, or SPA. Inthe absence of an agreed SPA, there can be no assurance that the FDA will agree with the protocols used in REALISE 1, our Phase 3 pivotal clinical trial protocol, or ourplanned additional Phase 3 pivotal clinical trial in the United States and subsequent European Phase 3 pivotal clinical trial.Further, after our Phase 2 clinical trials, we used the FDA’s Formal Dispute Resolution process to obtain confirmation from the FDA that our proposed indication,primary endpoint assessment and primary endpoint measurement were acceptable for continued clinical trials. At the end of this process, the FDA indicated that the finalproduct indication would depend on the patient populations studied, the data collected, and the interpretation of the data during the BLA review process. The FDA alsoindicated its expectation for demonstration of the paralytic mechanism of action in RT001 topical to be assessed at maximum contraction, or "at smile," to inform itsanalysis of the risks and benefits of RT001 topical. Our clinical development program for RT001 topical measures effect "at smile" as an additional assessment endpoint todemonstrate botulinum toxin's effect on the relaxation of muscle at maximum contraction. However, age-related crow's feet of the upper face are the lines visible "at rest,"and the primary endpoint of our clinical development program measures the efficacy of RT001 topical by a composite of physician and patient assessments "at rest."In August 2014, the FDA issued a Draft Guidance prepared by the Division of Dermatology and Dental Products entitled "Upper Facial Lines: Developing BotulinumToxin Drug Products." The Draft Guidance, among other things, recommends assessing the primary endpoint measurement for efficacy at maximum contraction,recommends defining treatment success as a score of 0 or 1 and at least a two grade reduction on both investigator and subject assessments, and recommends that review ofphotographs at maximum contraction by a masked independent committee be a required secondary efficacy measurement. We responded to the FDA's request for publiccomment on the non-binding Draft Guidance on October 30, 2014 and our response was filed as an exhibit to our Current Report on Form 8-K, filed with the SEC onNovember 4, 2014. We do not know when the guidance will be finalized, if at all, or the recommendations that will be contained therein. Even if final guidance is issued bythe FDA, industry may pursue approval using an alternative approach if the approach satisfies the requirements of the applicable statutes and regulations. After consultationwith our regulatory consultants, and based on the outcome of our Formal Dispute Resolution and related written confirmation from the FDA that we could proceed withPhase 3 development, we plan to complete our RT001 topical clinical trials using our current primary endpoint assessment by a composite of investigator and patientassessments "at rest," supplemented by an additional assessment "at smile" to demonstrate the paralytic mechanism of action in RT001 topical is a botulinum toxin effect.While the FDA provided written confirmation that our proposed indication, primary endpoint assessment and primary endpoint measurement were acceptable forPhase 3 clinical trials, the FDA has not confirmed that our proposed indication, primary endpoint assessment and primary endpoint measurement are acceptable forregulatory approval. Further, while we did obtain written confirmation with respect to these aspects of our Phase 3 clinical trial designs, there is no assurance that the FDAwill approve our BLA for RT001 topical, will agree that the benefits of RT001 topical outweigh its risks or will not raise new concerns regarding our clinical trial designs.Even if we eventually complete clinical testing and receive approval of any regulatory filing for RT001 topical, RT002 injectable or any future product candidates, theFDA or the applicable foreign regulatory agency may grant approval contingent on the performance of costly additional post-approval clinical trials. The FDA or theapplicable foreign regulatory agency also may approve RT001 topical, RT002 injectable or any future product candidates for a more limited indication or a narrower patientpopulation than we originally requested, and the FDA or applicable foreign regulatory agency may not approve the labeling that we believe is necessary or desirable for thesuccessful commercialization of our product candidates. Any delay in obtaining, or inability to obtain, applicable regulatory approval for any of our product candidates andRT001 topical, in27Table of Contentsparticular, would delay or prevent commercialization of RT001 topical and would materially adversely impact our business, results of operations and prospects.We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all,could force us to delay, limit, reduce or terminate our product development, other operations or commercialization efforts.Since our inception, most of our resources have been dedicated to the research and preclinical and clinical development of our botulinum toxin product candidatesRT001 topical and RT002 injectable. In particular, our U.S. clinical programs for RT001 topical and RT002 injectable will require substantial additional funds to complete.We have recorded net losses of $73.5 million , $62.9 million , and $52.4 million for the years ended December 31, 2015 , 2014 and 2013 , respectively, had an accumulateddeficit as of December 31, 2015 of $332.3 million and had a working capital surplus of $241.9 million as of December 31, 2015 , primarily as a result of our IPO, June 2014and November 2015 follow-on public offerings, and At-The-Market, or ATM offering. We have funded our operations primarily through the sale and issuance ofconvertible preferred stock, common stock, notes payable and convertible notes. As of December 31, 2015 , we had capital resources consisting of cash, cash equivalents,and investments of $254.1 million . On February 6, 2014, we sold 6,900,000 shares of common stock at $16.00 per share for aggregate net proceeds of $98.6 million in ourIPO, after underwriting discounts, commissions, and other offering expenses. On June 19, 2014, we sold 4,600,000 shares of common stock at $30.50 per share foraggregate net proceeds of $131.3 million in our follow-on public offering, after underwriting discounts, commissions, and other offering expenses. In the third quarter of2015, we sold 352,544 shares of our common stock under the ATM agreement at a weighted average price of $30.76 per share resulting in net proceeds of approximately$10.0 million , after underwriting discounts, commissions, and other offering expenses. On November 9, 2015, we completed a follow-on public offering, pursuant to whichwe issued 3,737,500 shares of common stock at $ 36.00 per share, including the exercise of the underwriters’ option to purchase 487,500 additional shares of commonstock, for net proceeds of $126.2 million . We believe that we will continue to expend substantial resources for the foreseeable future for the clinical development of RT001topical, RT002 injectable and development of any other indications and product candidates that we may choose to pursue. These expenditures will include costs associatedwith research and development, conducting preclinical studies and clinical trials, and manufacturing and supply as well as marketing and selling any products approved forsale. In addition, other unanticipated costs may arise. Because the outcome of any clinical trial is highly uncertain, we cannot reasonably estimate the actual amountsnecessary to successfully complete the development and commercialization of RT001 topical, RT002 injectable and any future product candidates.We believe that our existing cash, cash equivalents, and investments including the net proceeds from our IPO, follow-on public offerings, and ATM offering willallow us to fund our operations for at least the next 12 months. However, our operating plan may change as a result of many factors currently unknown to us, and we mayneed to seek additional capital sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations. Such financingsmay result in dilution to stockholders, imposition of debt covenants and repayment obligations or other restrictions that may affect our business. In addition, we may seekadditional capital due to favorable market conditions or strategic considerations even if we believe that we have sufficient funds for our current or future operating plans.Our future capital requirements depend on many factors, including: •the results of our clinical trials for RT001 topical and RT002 injectable;•the timing of, and the costs involved in, obtaining regulatory approvals for RT001 topical, RT002 injectable or any future product candidates;•the number and characteristics of any additional product candidates we develop or acquire;•the scope, progress, results and costs of researching and developing RT001 topical, RT002 injectable or any future product candidates, and conductingpreclinical and clinical trials;•the cost of commercialization activities if RT001 topical, RT002 injectable or any future product candidates are approved for sale, including marketing, salesand distribution costs;•the cost of manufacturing RT001 topical, RT002 injectable or any future product candidates and any products we successfully commercialize and maintainingour related facilities;•our ability to establish and maintain strategic collaborations, licensing or other arrangements and the terms of and timing such arrangements;•the degree and rate of market acceptance of any future approved products;•the emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing products ortreatments;28Table of Contents•any product liability or other lawsuits related to our products;•the expenses needed to attract and retain skilled personnel;•any litigation, including litigation costs and the outcome of such litigation;•the costs associated with being a public company;•the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of suchlitigation; and•the timing, receipt and amount of sales of, or royalties on, future approved products, if any.Additional capital may not be available when needed, on terms that are acceptable to us or at all. If adequate funds are not available to us on a timely basis, we may berequired to delay, limit, reduce or terminate preclinical studies, clinical trials, research, development, manufacturing, sales, marketing or other commercial activities forRT001 topical, RT002 injectable or any future product candidate.If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties,we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that maynot be favorable to us. If we raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted and theterms of any new equity securities may have a preference over our common stock. If we raise additional capital through debt financing, we may be subject to covenantslimiting or restricting our ability to take specific actions, such as incurring additional debt or making capital expenditures or specified financial ratios, any of which couldrestrict our ability to commercialize our product candidates or operate as a business.Even if our product candidates receive regulatory approval, they may fail to achieve the broad degree of physician adoption and use necessary for commercialsuccess.The commercial success of RT001 topical, RT002 injectable and any future product candidates, if approved, will depend significantly on the broad adoption and useof the resulting product by physicians for approved indications. The degree and rate of physician adoption of RT001 topical, RT002 injectable and any future productcandidates, if approved, will depend on a number of factors, including: •the effectiveness and duration of effect of our product as compared to existing therapies;•physician willingness to adopt a new therapy to treat crow’s feet, hyperhidrosis, glabellar lines, cervical dystonia or other aesthetic or therapeutic indications;•overcoming any biases physicians or patients may have toward injectable procedures for the treatment of crow’s feet, hyperhidrosis or other indications;•patient satisfaction with the results and administration of our product and overall treatment experience;•patient demand for the treatment of crow’s feet, hyperhidrosis, glabellar lines, cervical dystonia or other aesthetic or therapeutic indications; and•the revenue and profitability that our product will offer a physician as compared to alternative therapies.If RT001 topical, RT002 injectable or any future product candidates are approved for use but fail to achieve the broad degree of physician adoption necessary forcommercial success, our operating results and financial condition will be adversely affected.Our product candidates, if approved, will face significant competition and our failure to effectively compete may prevent us from achieving significant marketpenetration and expansion.We expect to enter highly competitive pharmaceutical and medical device markets. Successful competitors in the pharmaceutical and medical device markets have theability to effectively discover, obtain patents, develop, test and obtain regulatory approvals for products, as well as the ability to effectively commercialize, market andpromote approved products, including communicating the effectiveness, safety and value of products to actual and prospective customers and medical staff. Numerouscompanies are engaged in the development, patenting, manufacture and marketing of healthcare products competitive with those that we are developing. Many of thesepotential competitors are large, experienced companies that enjoy significant competitive advantages, such as substantially greater financial, research and development,manufacturing, personnel and marketing resources, greater brand recognition and more experience and expertise in obtaining marketing approvals from the FDA and otherregulatory authorities.29Table of ContentsUpon marketing approval, the first expected use of our products will be in aesthetic medicine. The aesthetic product market, and the facial aesthetic market inparticular, is highly competitive and dynamic, and is characterized by rapid and substantial technological development and product innovations. This market is alsocharacterized by competitors obtaining patents to protect what they consider to be their intellectual property. We plan to seek regulatory approval of RT001 topical for thetreatment of crow’s feet and RT002 injectable for the treatment of glabellar lines.We anticipate that RT001 topical, if approved for the treatment of crow's feet, will face significant competition from other facial aesthetic products, includinginjectable botulinum toxins and dermal fillers. If approved, RT001 topical may also compete with unapproved and off-label treatments. We anticipate that RT002 injectable,if approved, will also face significant competition from existing injectable botulinum toxins and dermal fillers, as well as unapproved and off-label treatments. Further, ifapproved, in the future we may face competition for both RT001 topical and RT002 injectable from biosimilar products and products based upon botulinum toxin. Tocompete successfully in the aesthetic market, we will have to demonstrate that the reduction of crow’s feet with RT001 topical or the treatment of glabellar lines withRT002 injectable is a worthwhile aesthetic treatment and has advantages over existing therapies. Competing in the aesthetic market could result in price-cutting, reducedprofit margins and limited market share, any of which would harm our business, financial condition and results of operations.Due to less stringent regulatory requirements, there are many more aesthetic products and procedures available for use in international markets than are approved foruse in the United States. There are also fewer limitations on the claims that our competitors in international markets can make about the effectiveness of their products andthe manner in which they can market them. As a result, we face more competition in these markets than in the United States.We currently make our RT001 topical clinical drug product exclusively in one manufacturing facility and our RT002 injectable clinical drug product in the sameand one other external facility. We plan to utilize certain of these facilities in the future to support commercial production if our product candidates are approved.If these or any future facility or our equipment were damaged or destroyed, or if we experience a significant disruption in our operations for any reason, ourability to continue to operate our business would be materially harmed.We currently manufacture our own clinical drug product to support RT001 topical exclusively in a single facility and plan to utilize this facility in the future tosupport commercial production if RT001 topical is approved. The drug product to support RT002 injectable clinical trials is manufactured in the same facility, as well as inan external manufacturing facility. We expect that additional manufacturing capacity would need to be established in the future to support commercial production of RT002injectable if this product candidate is approved. If these or any future facility were to be damaged, destroyed or otherwise unable to operate, whether due to earthquakes,fire, floods, hurricanes, storms, tornadoes, other natural disasters, employee malfeasance, terrorist acts, power outages or otherwise, or if performance of our manufacturingfacilities is disrupted for any other reason, such an event could delay our clinical trials or, if our product candidates are approved, jeopardize our ability to manufacture ourproducts as promptly as our customers expect or possibly at all. If we experience delays in achieving our development objectives, or if we are unable to manufacture anapproved product within a timeframe that meets our customers’ expectations, our business, prospects, financial results and reputation could be materially harmed.Currently, we maintain insurance coverage totaling $27.7 million against damage to our property and equipment, $2.0 million in general liability coverage, a $9.0million umbrella policy, and an additional $35.0 million to cover business interruption and research and development restoration expenses, subject to deductibles and otherlimitations. If we have underestimated our insurance needs with respect to an interruption, or if an interruption is not subject to coverage under our insurance policies, wemay not be able to cover our losses.Impairment in the carrying value of long-lived assets could negatively affect our operating results.We have constructed, and are continuing to invest capital to validate a larger capacity fill-finish line dedicated to the manufacture of our product candidate RT001topical and to support our regulatory license applications. Under generally accepted accounting principles in the United States, long-lived assets, such as our fill-finish line,are required to be reviewed for impairment whenever adverse events or changes in circumstances indicate a possible impairment. If business conditions or other factorsindicate that the carrying value of the asset may not be recoverable, we may be required to record non-cash impairment charges. Additionally, if the carrying value of ourcapital equipment exceeds current fair value as determined based on the discounted future cash flows of the related product, the capital equipment would be consideredimpaired and would be reduced to fair value by a non-cash charge to earnings, which could negatively affect our operating results. Events and conditions that could result inimpairment in the value of our long-lived assets include adverse clinical trial results, unfavorable changes in competitive landscape, adverse changes in the regulatoryenvironment, or other factors leading to reduction in30Table of Contentsexpected long-term sales or profitability. During the years ended December 31, 2015 , 2014 , and 2013 , we did not record any impairment losses.We have a limited operating history and have incurred significant losses since our inception and we anticipate that we will continue to incur losses for theforeseeable future. We have only two product candidates in clinical trials and no commercial sales, which, together with our limited operating history, make itdifficult to assess our future viability.We are a clinical-stage biotechnology company with a limited operating history. Biotechnology product development is a highly speculative undertaking and involvesa substantial degree of risk. We are not profitable and have incurred losses in each year since we commenced operations in 2002. We have only a limited operating historyupon which you can evaluate our business and prospects. In addition, we have limited experience and have not yet demonstrated an ability to successfully overcome manyof the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biotechnology industry. To date, we have notobtained any regulatory approvals for any of our product candidates or generated any revenue from product sales relating to RT001 topical or RT002 injectable. Wecontinue to incur significant research and development and other expenses related to our ongoing clinical trials and operations. We have recorded net losses of $73.5 million, $62.9 million , and $52.4 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively, had an accumulated deficit through December 31, 2015 of$332.3 million and had a working capital surplus of $241.9 million as of December 31, 2015 , primarily as a result of our IPO, June 2014 and November 2015 follow-onpublic offerings, and ATM offering. In February 2014, we closed our IPO. The net proceeds from the sale of the shares in our IPO and our June 2014 follow-on publicoffering, after deducting the underwriters’ discount, commissions, and other offering expenses related to the IPO and follow-on offering were approximately $98.6 millionand $131.3 million , respectively. In November 2015, the Company also completed a public offering for net proceeds of $126.2 million . Our capital requirements toimplement our business strategy are substantial, including our capital requirements to develop and commercialize RT001 topical and RT002 injectable. We believe that ourcurrently available capital is sufficient to fund our operations through at least the next 12 months.We expect to continue to incur losses for the foreseeable future, and we anticipate that these losses will increase as we continue our development of, and seekregulatory approvals for, RT001 topical and RT002 injectable, and begin to commercialize RT001 topical and RT002 injectable. Our ability to achieve revenue andprofitability is dependent on our ability to complete the development of our product candidates, obtain necessary regulatory approvals and manufacture, market andcommercialize our products successfully. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses,combined with expected future losses, may adversely affect the market price of our common stock and our ability to raise capital and continue operations.Even if RT001 topical, RT002 injectable or any future product candidates obtain regulatory approval, they may never achieve market acceptance or commercialsuccess.Even if we obtain FDA or other regulatory approvals, RT001 topical, RT002 injectable or any future product candidates may not achieve market acceptance amongphysicians and patients, and may not be commercially successful.The degree and rate of market acceptance of RT001 topical, RT002 injectable or any future product candidates for which we receive approval depends on a number offactors, including:•the safety and efficacy of the product as demonstrated in clinical trials;•the clinical indications for which the product is approved;•acceptance by physicians, major operators of clinics and patients of the product as a safe and effective treatment;•proper training and administration of our products by physicians and medical staff;•the potential and perceived advantages of our products over alternative treatments;•the cost of treatment in relation to alternative treatments and willingness to pay for our products, if approved, on the part of physicians and patients;•the willingness of patients to pay for RT001 topical, RT002 injectable and other aesthetic treatments in general, relative to other discretionary items,especially during economically challenging times;•the willingness of third-party payors to reimburse physicians for RT001 topical, RT002 injectable and any future products we may commercialize;•relative convenience and ease of administration;•the prevalence and severity of adverse events; and•the effectiveness of our sales and marketing efforts.31Table of ContentsAny failure by our product candidates that obtain regulatory approval to achieve market acceptance or commercial success would materially adversely affect ourresults of operations and delay, prevent or limit our ability to generate revenue and continue our business.Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive offuture trial results.Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Furthermore, we rely on contract research organizations, orCROs, and clinical trial sites to ensure the proper and timely conduct of our clinical trials. While we have agreements governing the committed activities of our CROs, wehave limited influence over their actual performance. A failure of one or more of our clinical trials can occur at any time during the clinical trial process. The results ofpreclinical studies and clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Furthermore, final results may differ frominterim results. For example, any positive results generated to date in clinical trials for RT001 topical or RT002 injectable do not ensure that later clinical trials, includingour RT001 topical Phase 3 clinical trials for the treatment of crow’s feet or any RT002 injectable clinical trials for the treatment of glabellar lines, will demonstrate similarresults. Product candidates in later stages of clinical trials may fail to show the desired safety profile and efficacy despite having progressed through preclinical studies andinitial clinical trials. In particular, we have conducted two Phase 2b controlled clinical trials of RT001 topical, in which RT001 topical met the primary efficacy and allsecondary endpoints. We have also conducted one open-label, Phase 2b safety trial, which demonstrated that sequential applications of RT001 topical appear to be safe andwell-tolerated, even at an accelerated frequency. However, we have conducted one Phase 3 clinical efficacy trial using a modified diluent formulation, the results of whichwere inconsistent with our previous Phase 2b clinical trials and which did not show improvement from baseline in either the placebo or RT001 topical group. In October2014, we conducted an open-label clinical trial of our RT001 topical drug product. The safety analysis from the 43 subjects enrolled in the open-label trial indicated thatRT001 topical appeared to be well-tolerated. The efficacy analysis showed clinically meaningful efficacy measured by the one-point investigator’s global assessment, orIGA, and the one-point patient severity assessment, or PSA, as well as in the aggregate for the composite one-point assessment. The two-point response rates for theindividual IGA and composite IGA and PSA assessments, however, did not meet the endpoints for the subjects enrolled in the trial. Following a comprehensive analysis ofthe data obtained in this trial, we determined that the preliminary composite results were not adequate to move forward with our Phase 3 pivotal trial at such time.In the first half of 2015, we then commenced and completed an additional open-label clinical trial using RT001 topical. We designed this study to evaluate theattributes of different RT001 topical drug products aimed at improving the interaction between our peptide and toxin. The safety analysis from the 69 subjects enrolled inthis study indicated that RT001 topical appeared to be well-tolerated. The efficacy analysis for two of the RT001 topical drug products evaluated in this open-label trialshowed clinically meaningful efficacy measured by the one-point IGA and the one-point PSA as well as in the aggregate for the composite one-point assessment. In thesame two RT001 topical drug products evaluated, we observed some two-point composite response but given the small number of subjects enrolled in this trial, the patientresponse and other results observed are not necessarily predictive of future clinical trial results. Following analysis of the data available from these open-label studies, takentogether with our analysis of prior studies and early data from newly developed clinical methods, we decided to proceed with a RT001 topical U.S. Phase 3 clinical trial forthe treatment of crow's feet using a drug product that incorporates attributes of the drug products evaluated in the 2015 open-label trial.A number of companies in the biotechnology industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles,notwithstanding promising results in earlier clinical trials, and we cannot be certain that we will not face similar setbacks. Even if our clinical trials are completed, theresults may not be sufficient to obtain regulatory approval for our product candidates.32Table of ContentsWe have in the past and may in the future experience delays in our ongoing clinical trials, and we do not know whether future clinical trials, if any, will begin on time,need to be redesigned, enroll an adequate number of subjects on time or be completed on schedule, if at all. Clinical trials can be delayed or aborted for a variety of reasons,including delay or failure to: •obtain regulatory approval to commence a trial;•reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may varysignificantly among different CROs and trial sites;•obtain institutional review board, or IRB, approval at each site;•recruit suitable subjects to participate in a trial;•have subjects complete a trial or return for post-treatment follow-up;•ensure clinical sites observe trial protocol or continue to participate in a trial;•address any patient safety concerns that arise during the course of a trial;•address any conflicts with new or existing laws or regulations;•add a sufficient number of clinical trial sites; or•manufacture sufficient quantities of product candidate for use in clinical trials.Subject enrollment is a significant factor in the timing of clinical trials and is affected by many factors, including the size and nature of the patient population, theproximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions asto the potential advantages of the drug being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indicationswe are investigating.We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by the datasafety monitoring board, for such trial or by the FDA or other regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors,including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by theFDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from usinga drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates maybe harmed, and our ability to generate product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical trials willincrease our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any ofthese occurrences may significantly harm our business, financial condition and prospects. In addition, many of the factors that cause, or lead to, a delay in thecommencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.We have no experience manufacturing our product candidates at full commercial scale. If our product candidates are approved, we will face certain risksassociated with scaling up our manufacturing capabilities to support commercial production.We have developed an integrated manufacturing, research and development facility located at our corporate headquarters. We manufacture drug substance andfinished dose forms of drug product at this facility that we use for research and development purposes and for clinical trials of our product candidates. We do not haveexperience in manufacturing our product candidates at commercial scale. If our product candidates are approved, we may need to expand our manufacturing facilities, addmanufacturing personnel and ensure that validated processes are consistently implemented in our facilities. For example, we are building a larger capacity fill-finish linededicated to our product candidate RT001 topical and to support our regulatory license applications, if approved. In addition, we expect to further scale up our RT002injectable drug product manufacturing. The upgrade and expansion of our facilities will require additional regulatory approvals. In addition, it will be costly and time-consuming to expand our facilities and recruit necessary additional personnel. If we are unable to expand our manufacturing facilities in compliance with regulatoryrequirements or to hire additional necessary manufacturing personnel, we may encounter delays or additional costs in achieving our research, development andcommercialization objectives, including in obtaining regulatory approvals of our product candidates, which could materially damage our business and financial position.33Table of ContentsWe currently contract with third-party manufacturers for certain components necessary to produce RT001 topical for clinical trials and expect to continue to doso to support commercial scale production if RT001 topical is approved. This increases the risk that we will not have sufficient quantities of RT001 topical or suchquantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.We currently rely on third-party manufacturers for certain components necessary to produce RT001 topical for our clinical trials, including the bulk peptide, diluentand the delivery applicator and expect to continue to rely on these or other manufacturers to support our commercial requirements if RT001 topical is approved. Some ofour contracts with our manufacturers contain minimum order and pricing provisions and provide for early termination based on regulatory approval milestones. Reliance onthird-party manufacturers entails additional risks, including reliance on the third party for regulatory compliance and quality assurance, the possible breach of themanufacturing agreement by the third party, and the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. Inaddition, third- party manufacturers may not be able to comply with cGMP or Quality System Regulation, or QSR, or similar regulatory requirements outside the UnitedStates. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines,injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and criminalprosecutions, any of which could significantly and adversely affect supplies of RT001 topical, RT002 injectable or any other product candidates or products that we maydevelop. Any failure or refusal to supply the components for RT001 topical, RT002 injectable or any other product candidates or products that we may develop could delay,prevent or impair our clinical development or commercialization efforts.We depend on single-source suppliers for the raw materials necessary to produce our product candidates. The loss of these suppliers, or their failure to supply uswith these raw materials, would materially and adversely affect our business.We and our manufacturers purchase the materials necessary to produce RT001 topical and RT002 injectable for our clinical trials from single-source third-partysuppliers. There are a limited number of suppliers for the raw materials that we use to manufacture our product candidates and we may need to assess alternate suppliers toprevent a possible disruption of the manufacture of the materials necessary to produce our product candidates for our clinical trials, and if approved, ultimately forcommercial sale. In particular, we outsource the manufacture of bulk peptide through American Peptide Company, Inc., the RT001 topical diluent through HospiraWorldwide, Inc. and our RT001 topical delivery applicator through Duoject. American Peptide, Hospira, and Duoject were recently or have been acquired by Bachem,Pfizer, Inc., and Novocol Healthcare, Inc., respectively. We do not have any control over the process or timing of the acquisition of raw materials by our manufacturers.Although we generally do not begin a clinical trial unless we believe that we have a sufficient supply of a product candidate to complete the clinical trial, any significantdelay in the supply of RT001 topical, RT002 injectable or any future product candidates, or the raw material components thereof, for an ongoing clinical trial due to theneed to replace a third-party supplier could considerably delay completion of our clinical trials, product testing and potential regulatory approval of RT001 topical, RT002injectable or any future product candidates. If we or our manufacturers are unable to purchase these raw materials on acceptable terms, at sufficient quality levels, or inadequate quantities, if at all, the development of RT001 topical, RT002 injectable and any future product candidates, or the commercial launch of any approved products,would be delayed or there would be a shortage in supply, which would impair our ability to meet our development objectives for our product candidates or generaterevenues from the sale of any approved products.Furthermore, if there is a disruption to our or our third-party suppliers’ relevant operations, we will have no other means of producing RT001 topical, RT002injectable or any future product candidates until they restore the affected facilities or we or they procure alternative facilities. Additionally, any damage to or destruction ofour or our third party or suppliers’ facilities or equipment may significantly impair our ability to manufacture our product candidates on a timely basis.We or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters and our business continuity and disasterrecovery plans may not adequately protect us from a serious disaster.Our corporate headquarters and other facilities, including our sole manufacturing facility, are located in the San Francisco Bay Area, which in the past hasexperienced severe earthquakes. We do not carry earthquake insurance. Earthquakes or other natural disasters could severely disrupt our operations, and have a materialadverse effect on our business, results of operations, financial condition and prospects.34Table of ContentsIf a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged criticalinfrastructure, such as our manufacturing facility, enterprise financial systems or manufacturing resource planning and enterprise quality systems, or that otherwisedisrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. In particular, because wemanufacture botulinum toxin in our facilities, we would be required to obtain further clearance and approval by state, federal or other applicable authorities to continue orresume manufacturing activities. The disaster recovery and business continuity plans we have in place currently are limited and may not be adequate in the event of aserious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which,particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.Furthermore, integral parties in our supply chain are geographically concentrated and operating from single sites, increasing their vulnerability to natural disasters orother sudden, unforeseen and severe adverse events. If such an event were to affect our supply chain, it could have a material adverse effect on our business.We currently rely on third parties and consultants to conduct all our preclinical studies and clinical trials. If these third parties or consultants do not successfullycarry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for or commercialize RT001 topical, RT002injectable or any future product candidates.We do not have the ability to independently conduct preclinical studies or clinical trials. We rely on medical institutions, clinical investigators, contract laboratories,collaborative partners and other third parties, such as CROs, to conduct clinical trials on our product candidates. The third parties with whom we contract for execution ofour clinical trials play a significant role in the conduct of these trials and the subsequent collection and analysis of data. However, these third parties are not our employees,and except for contractual duties and obligations, we have limited ability to control the amount or timing of resources that they devote to our programs. Although we rely onthese third parties to conduct our preclinical studies and clinical trials, we remain responsible for ensuring that each of our preclinical studies and clinical trials is conductedin accordance with its investigational plan and protocol. Moreover, the FDA and foreign regulatory authorities require us to comply with regulations and standards,commonly referred to as good clinical practices, or GCPs and GLPs for conducting, monitoring, recording and reporting the results of clinical and preclinical trials,respectively, to ensure that the data and results are scientifically credible and accurate, and that the trial subjects are adequately informed of the potential risks ofparticipating in clinical trials. We also rely on consultants to assist in the execution, including data collection and analysis, of our clinical trials.In addition, the execution of preclinical studies and clinical trials, and the subsequent compilation and analysis of the data produced, requires coordination amongvarious parties. In order for these functions to be carried out effectively and efficiently, it is imperative that these parties communicate and coordinate with one another.Moreover, these third parties may also have relationships with other commercial entities, some of which may compete with us. These third parties may terminate theiragreements with us upon as little as 30 days’ prior written notice of a material breach by us that is not cured within 30 days. Many of these agreements may also beterminated by such third parties under certain other circumstances, including our insolvency or our failure to comply with applicable laws. In general, these agreementsrequire such third parties to reasonably cooperate with us at our expense for an orderly winding down of services of such third parties under the agreements. If the thirdparties or consultants conducting our clinical trials do not perform their contractual duties or obligations, experience work stoppages, do not meet expected deadlines,terminate their agreements with us or need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to ourclinical trial protocols or GCP, or for any other reason, we may need to conduct additional clinical trials or enter into new arrangements with alternative third parties, whichcould be difficult, costly or impossible, and our clinical trials may be extended, delayed or terminated or may need to be repeated. If any of the foregoing were to occur, wemay not be able to obtain, or may be delayed in obtaining, regulatory approval for, and will not be able to, or may be delayed in our efforts to, successfully commercializethe product candidate being tested in such trials.35Table of ContentsOur ability to market RT001 topical, if approved, will be limited initially to use for the treatment of crow’s feet, and if we want to expand the indications forwhich we may market RT001 topical or seek regulatory approval for RT002 injectable, we will need to obtain additional regulatory approvals, which may not begranted.We plan to seek regulatory approval for RT001 topical in the United States and Europe for the treatment of crow’s feet. If RT001 topical is approved, the applicableregulatory agency will restrict our ability to market or advertise RT001 topical for other indications, which could limit physician and patient adoption. We may attempt todevelop, promote and commercialize new treatment indications and protocols for RT001 topical, as well as seek regulatory approval for RT002 injectable, in the future, butwe cannot predict when or if we will receive the clearances required to do so. In addition, we would be required to conduct additional clinical trials or studies to supportapprovals for additional indications, which would be time-consuming and expensive, and may produce results that do not support regulatory approvals. If we do not obtainadditional regulatory approvals, our ability to expand our business will be limited.If RT001 topical and/or RT002 injectable is approved for marketing, and we are found to have improperly promoted off-label uses, or if physicians misuse ourproducts or use our products off-label, we may become subject to prohibitions on the sale or marketing of our products, significant fines, penalties, and sanctions,product liability claims, and our image and reputation within the industry and marketplace could be harmed.The FDA and other regulatory agencies strictly regulate the marketing and promotional claims that are made about drug products, such as RT001 topical and RT002injectable, if approved. In particular, a product may not be promoted for uses or indications that are not approved by the FDA or such other regulatory agencies as reflectedin the product’s approved labeling. For example, if we receive marketing approval for RT001 topical for the treatment of crow’s feet, the first indication we are pursuing,we cannot prevent physicians from using our RT001 topical products on their patients in a manner that is inconsistent with the approved label, potentially including for thetreatment of other aesthetic or therapeutic indications. If we are found to have promoted such off-label uses, we may receive warning letters and become subject tosignificant liability, which would materially harm our business. The federal government has levied large civil and criminal fines against companies for alleged improperpromotion and has enjoined several companies from engaging in off-label promotion. If we become the target of such an investigation or prosecution based on ourmarketing and promotional practices, we could face similar sanctions, which would materially harm our business. In addition, management’s attention could be divertedfrom our business operations, significant legal expenses could be incurred, and our reputation could be damaged. The FDA has also requested that companies enter intoconsent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we are deemed by the FDA to have engaged in thepromotion of our products for off-label use, we could be subject to FDA prohibitions on the sale or marketing of our products or significant fines and penalties, and theimposition of these sanctions could also affect our reputation and position within the industry.Physicians may also misuse our products or use improper techniques, potentially leading to adverse results, side effects or injury, which may lead to product liabilityclaims. If our products are misused or used with improper technique, we may become subject to costly litigation by our customers or their patients. Product liability claimscould divert management’s attention from our core business, be expensive to defend, and result in sizable damage awards against us that may not be covered by insurance.Furthermore, the use of our products for indications other than those cleared by the FDA may not effectively treat such conditions, which could harm our reputation in themarketplace among physicians and patients.Any of these events could harm our business and results of operations and cause our stock price to decline.36Table of ContentsEven if RT001 topical, RT002 injectable or any future product candidate is approved for commercialization, if there is not sufficient patient demand for suchprocedures, our financial results and future prospects will be harmed.Treatment of crow’s feet with RT001 topical and glabellar lines with RT002 injectable, are elective procedures, the cost of which must be borne by the patient, andwe do not expect it to be reimbursable through government or private health insurance. The decision by a patient to elect to undergo the treatment of crow’s feet withRT001 topical, the treatment of glabellar lines with RT002 injectable or the treatment of other aesthetic indications we may pursue may be influenced by a number offactors, including: •the success of any sales and marketing programs that we, or any third parties we engage, undertake, and as to which we have limited experience;•the extent to which physicians recommend RT001 topical or RT002 injectable to their patients;•the extent to which RT001 topical or RT002 injectable satisfies patient expectations;•our ability to properly train physicians in the use of RT001 topical or RT002 injectable such that their patients do not experience excessive discomfort duringtreatment or adverse side effects;•the cost, safety and effectiveness of RT001 topical or RT002 injectable versus other aesthetic treatments;•consumer sentiment about the benefits and risks of aesthetic procedures generally and RT001 topical or RT002 injectable in particular;•the success of any direct-to-consumer marketing efforts we may initiate; and•general consumer confidence, which may be impacted by economic and political conditions.Our business, financial results and future prospects will be materially harmed if we cannot generate sufficient demand for RT001 topical, or for RT002 injectable orany other future product candidate, once approved.We are subject to uncertainty relating to reimbursement policies which, if not favorable for RT001 topical, RT002 injectable or any future product candidates,could hinder or prevent their commercial success.Our ability to commercialize RT001 topical, RT002 injectable, or any future product candidates for therapeutic indications such as hyperhidrosis or cervical dystoniawill depend in part on the coverage and reimbursement levels set by governmental authorities, private health insurers and other third-party payors. As a threshold forcoverage and reimbursement, third-party payors generally require that drug products have been approved for marketing by the FDA. Third-party payors also areincreasingly challenging the effectiveness of and prices charged for medical products and services. We may not obtain adequate third-party coverage or reimbursement forRT001 topical, RT002 injectable or any future product candidates, or we may be required to sell them at a discount.We expect that private insurers will consider the efficacy, cost effectiveness and safety of RT001 topical and RT002 injectable in determining whether to approvereimbursement for RT001 topical and RT002 injectable and at what level. Obtaining these approvals can be a time-consuming and expensive process. Our business wouldbe materially adversely affected if we do not receive approval for reimbursement of RT001 topical or RT002 injectable from private insurers on a timely or satisfactorybasis. Our business could also be adversely affected if private insurers, including managed care organizations, the Medicare program or other reimbursing bodies or payorslimit the indications for which RT001 topical or RT002 injectable will be reimbursed to a smaller set than we believe they are effective in treating.In some foreign countries, particularly Canada and European countries, the pricing of prescription pharmaceuticals is subject to strict governmental control. In thesecountries, pricing negotiations with governmental authorities can take six to 12 months or longer after the receipt of regulatory approval and product launch. To obtainfavorable reimbursement for the indications sought or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectivenessof our products, including RT001 topical or RT002 injectable, to other available therapies. If reimbursement for our product is unavailable in any country in whichreimbursement is sought, limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed.37Table of ContentsWe currently have limited marketing capabilities and no sales organization. If we are unable to establish sales and marketing capabilities on our own or throughthird parties, we will be unable to successfully commercialize RT001 topical, RT002 injectable or any other future product candidates, if approved, or generateproduct revenue.We currently have limited marketing capabilities and no sales organization. To commercialize RT001 topical, RT002 injectable or any other future productcandidates, if approved, in the United States, Europe and other jurisdictions we seek to enter, we must build our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. If RT001 topical or RT002 injectablereceives regulatory approval, we expect to market RT001 topical or RT002 injectable, as applicable, through our own sales force in North America, and in Europe and othercountries through either our own sales force or a combination of our internal sales force and distributors or partners, which may be expensive and time-consuming. We haveno prior experience in the marketing, sale and distribution of pharmaceutical products and there are significant risks involved in building and managing a sales organization,including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel andeffectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distributioncapabilities would adversely impact the commercialization of these products. We may choose to collaborate with third parties that have direct sales forces and establisheddistribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. If we are unable to enter intosuch arrangements on acceptable terms or at all, we may not be able to successfully commercialize RT001 topical, RT002 injectable or any future product candidates. If weare not successful in commercializing RT001 topical, RT002 injectable or any future product candidates, either on our own or through collaborations with one or more thirdparties, our future product revenue will suffer and we would incur significant additional losses.To establish our sales and marketing infrastructure and expand our manufacturing capabilities, we will need to increase the size of our organization, and we mayexperience difficulties in managing this growth.As of December 31, 2015 , we had 103 full-time employees. We will need to continue to expand our managerial, operational, and other resources to manage ouroperations and clinical trials, continue our development activities and commercialize RT001 topical, RT002 injectable or any other product candidates, if approved. Ourmanagement, personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively execute our growth strategyrequires that we: •manage our clinical trials and manufacturing operations effectively;•identify, recruit, retain, incentivize and integrate additional employees;•manage our internal development efforts effectively while carrying out our contractual obligations to third parties; and•continue to improve our operational, financial and management controls, reporting systems and procedures.Due to our limited financial resources and our limited experience in managing a company with such anticipated growth, we may not be able to effectively manage theexpansion of our operations or recruit and train additional qualified personnel. The physical expansion of our operations may lead to significant costs and may divert ourmanagement and business development resources. Any inability to manage growth could delay the execution of our development and strategic objectives, or disrupt ouroperations.38Table of ContentsIf product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any future products wedevelop.We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize anyproducts. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing,marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in theproduct, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defendourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our products. Even a successful defense wouldrequire significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in: •decreased demand for RT001 topical, RT002 injectable or any future product candidates or products we develop;•injury to our reputation and significant negative media attention;•withdrawal of clinical trial participants or cancellation of clinical trials;•costs to defend the related litigation;•a diversion of management’s time and our resources;•substantial monetary awards to trial participants or patients;•regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;•loss of revenue; and•the inability to commercialize any products we develop.Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liabilityclaims could prevent or inhibit the commercialization of RT001 topical, RT002 injectable or any future products we develop. We currently carry product liability insurancecovering our clinical trials in the amount of $5.0 million in the aggregate. Although we maintain such insurance, any claim that may be brought against us could result in acourt judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurancepolicies also have various exclusions and deductibles, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amountsawarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain,sufficient capital to pay such amounts. Moreover, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect usagainst losses. If and when we obtain approval for marketing RT001 topical or RT002 injectable, we intend to expand our insurance coverage to include the sale of RT001topical or RT002 injectable, as applicable; however, we may be unable to obtain this liability insurance on commercially reasonable terms.We have been, and in the future may be, subject to securities class action and shareholder derivative actions. These, and potential similar or related litigation,could result in substantial damages and may divert management’s time and attention from our business.We have been, and may in the future be, the target of securities class actions or shareholder derivative claims. On May 1, 2015, a securities class action complaint wasfiled on behalf of City of Warren Police and Fire Retirement System against us and certain of our directors and executive officers at the time of our follow-on publicoffering, and the investment banking firms that acted as the underwriters in our follow-on public offering. This and any such other actions or claims could result insubstantial damages and may divert management’s time and attention from our business.If we fail to attract and keep senior management and key scientific personnel, we may be unable to successfully develop RT001 topical, RT002 injectable or anyfuture product candidates, conduct our clinical trials and commercialize RT001 topical, RT002 injectable or any future products we develop.Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. We believe that ourfuture success is highly dependent upon the contributions of our senior management, particularly our President and Chief Executive Officer, Chief Operating Officer, andChief Financial Officer and Chief Business Officer, as well as our senior scientists and other members of our senior management team. The loss of services of any of theseindividuals could delay or prevent the successful development of our product pipeline, completion of our planned clinical trials or the commercialization of RT001 topical,RT002 injectable or any future products we develop.39Table of ContentsLeadership transitions can be inherently difficult to manage. Resignations of executive officers may cause disruption in our business, strategic and employeerelationships, which may significantly delay or prevent the achievement of our business objectives. Leadership changes may also increase the likelihood of turnover in otherkey officers and employees and may cause declines in the productivity of existing employees. The search for a replacement officer may take many months or more, furtherexacerbating these factors. Identifying and hiring an experienced and qualified executive officer are typically difficult. Periods of transition in senior managementleadership are often difficult as the new executives gain detailed knowledge of the company’s operations and may result in cultural differences and friction due to changesin strategy and style. During the transition periods, there may be uncertainty among investors, employees, creditors and others concerning our future direction andperformance.Although we have not historically experienced unique difficulties attracting and retaining qualified employees, we could experience such problems in the future. Forexample, competition for qualified personnel in the biotechnology and pharmaceuticals field is intense and the turnover rate can be high due to the limited number ofindividuals who possess the skills and experience required by our industry. We will need to hire additional personnel as we expand our clinical development andcommercial activities. We may not be able to attract and retain quality personnel on acceptable terms, or at all. In addition, to the extent we hire personnel from competitors,we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their formeremployers own their research output.If we are not successful in discovering, developing, acquiring and commercializing additional product candidates, our ability to expand our business and achieveour strategic objectives would be impaired.Although a substantial amount of our effort will focus on the continued clinical testing and potential approval of RT001 topical and RT002 injectable, a key elementof our strategy is to discover, develop and commercialize a portfolio of botulinum toxin products to serve both the aesthetic and therapeutic markets. We are seeking to doso through our internal research programs and may explore strategic collaborations for the development or acquisition of new products. While our two product candidates,RT001 topical and RT002 injectable, are each in the clinical development stage, all of our other potential product candidates remain in the discovery or preclinical stage.Research programs to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimatelyidentified. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development formany reasons, including the following: •the research methodology used may not be successful in identifying potential product candidates;•competitors may develop alternatives that render our product candidates obsolete or less attractive;•product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights;•a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwisedoes not meet applicable regulatory criteria;•a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all;•a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors, if applicable; and•intellectual property rights of third parties may potentially block our entry into certain markets, or make such entry economically impracticable.If we fail to develop and successfully commercialize other product candidates, our business and future prospects may be harmed and our business will be morevulnerable to any problems that we encounter in developing and commercializing RT001 topical and RT002 injectable.40Table of ContentsThe requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain qualifiedmembers of our board of directors.We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Dodd-Frank Act, the NASDAQ listingrules and other applicable securities rules and regulations. Compliance with these rules and regulations has increased and will continue to increase our legal and financialcompliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources. The Sarbanes-Oxley Act requires,among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required,improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may berequired. As a result, management's attention may be diverted from other business concerns, which could harm our business and operating results. Although we have hiredadditional employees to comply with these requirements, we may need to hire more employees in the future, which will increase our costs and expenses.In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasinglegal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in manycases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Weintend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and adiversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standardsdiffer from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against usand our business may be harmed.As a public company that is subject to these rules and regulations we may find it is more expensive for us to obtain director and officer liability insurance, and wemay be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retainqualified members of our board of directors and qualified executive officers.Our business involves the use of hazardous materials and we and our third-party manufacturers and suppliers must comply with environmental laws andregulations, which can be expensive and restrict how we do business.Our research and development and manufacturing activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use anddisposal of hazardous materials owned by us, including botulinum toxin type A, a key component of our product candidates, and other hazardous compounds. We and ourmanufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. We arelicensed with the Centers for Disease Control and Prevention, or CDC and with the California Department of Health, Food and Drug Branch for use of botulinum toxin andto manufacture both the active pharmaceutical ingredient, or API, and the finished product in topical and injectable dose forms. In some cases, these hazardous materialsand various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal. We cannot eliminate the risk of contamination,which could cause an interruption of our commercialization efforts, research and development efforts and business operations, environmental damage resulting in costlyclean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. Althoughwe believe that the safety procedures utilized by us and our third-party manufacturers for handling and disposing of these materials generally comply with the standardsprescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials. In such anevent, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our useof certain materials and interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to becomemore stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance.41Table of ContentsWe may use third-party collaborators to help us develop, validate or commercialize any new products, and our ability to commercialize such products could beimpaired or delayed if these collaborations are unsuccessful.We may license or selectively pursue strategic collaborations for the development, validation and commercialization of RT001 topical, RT002 injectable and anyfuture product candidates. In any third-party collaboration, we would be dependent upon the success of the collaborators in performing their responsibilities and theircontinued cooperation. Our collaborators may not cooperate with us or perform their obligations under our agreements with them. We cannot control the amount and timingof our collaborators’ resources that will be devoted to performing their responsibilities under our agreements with them. Our collaborators may choose to pursue alternativetechnologies in preference to those being developed in collaboration with us. The development, validation and commercialization of our product candidates will be delayedif collaborators fail to conduct their responsibilities in a timely manner or in accordance with applicable regulatory requirements or if they breach or terminate theircollaboration agreements with us. Disputes with our collaborators could also impair our reputation or result in development delays, decreased revenues and litigationexpenses.Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. Furthermore, the market foraesthetic medical procedures may be particularly vulnerable to unfavorable economic conditions. We do not expect RT001 topical for the treatment of crow’s feet or RT002injectable for the treatment of glabellar lines to be reimbursed by any government or third-party payor and, as a result, demand for the first indications of each of ourproduct candidates will be tied to discretionary spending levels of our targeted patient population. The recent global financial crisis caused extreme volatility anddisruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand forRT001 topical, RT002 injectable or any future product candidates, if approved, and our ability to raise additional capital when needed on acceptable terms, if at all. This isparticularly true in Europe, which is undergoing a continued severe economic crisis. A weak or declining economy could also strain our suppliers, possibly resulting insupply disruption, or cause our customers to delay making payments for our services. Any of the foregoing could harm our business and we cannot anticipate all of the waysin which the current economic climate and financial market conditions could adversely impact our business.Risks Related to Our Intellectual PropertyIf our efforts to protect our intellectual property related to RT001 topical, RT002 injectable or any future product candidates are not adequate, we may not beable to compete effectively in our market.We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to RT001 topical, RT002injectable and our development programs. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors toquickly duplicate or surpass our technological achievements, eroding our competitive position in our market.42Table of ContentsThe strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. This uncertainty includeschanges to the patent laws through either legislative action to change statutory patent law or court action that may reinterpret existing law in ways affecting the scope orvalidity of issued patents. The patent applications that we own or license may fail to result in issued patents in the United States or foreign countries. Competitors in thefield of cosmetics, pharmaceuticals, and botulinum toxin have created a substantial amount of prior art, including scientific publications, patents and patent applications.Our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our technology and the prior art allow our technology to bepatentable over the prior art. Even if the patents do successfully issue, third parties may challenge the validity, enforceability or scope of such issued patents or any otherissued patents we own or license, which may result in such patents being narrowed, invalidated or held unenforceable. For example, patents granted by the European PatentOffice may be opposed by any person within nine months from the publication of their grant. Furthermore, even if they are unchallenged, our patents and patentapplications may not adequately protect our intellectual property or prevent others from designing around our claims. In addition, recent changes to the patent laws of theUnited States provide additional procedures for third parties to challenge the validity of issued patents. Patents issued from applications filed after March 15, 2013 may bechallenged by third parties using the post-grant review procedure which allows challenges for a number of reasons, including prior art, sufficiency of disclosure, and subjectmatter eligibility. Under the inter partes review procedure, any third party may challenge the validity of any issued U.S. Patent in the USPTO on the basis of prior art.Because of a lower evidentiary standard necessary to invalidate a patent claim in USPTO proceedings as compared to the evidentiary standard relied on in U.S. federalcourt, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would beinsufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patentclaims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. If the breadth or strength of protection provided bythe patents and patent applications we hold or pursue with respect to RT001 topical, RT002 injectable or any future product candidates is challenged, then it could threatenour ability to commercialize RT001 topical, RT002 injectable or any future product candidates, and could threaten our ability to prevent competitive products from beingmarketed. Further, if we encounter delays in our clinical trials, the period of time during which we could market RT001 topical, RT002 injectable or any future productcandidates under patent protection would be reduced. Since patent applications in the United States and most other countries are confidential for a period of time after filing,we cannot be certain that we were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our patentsor patent applications. Furthermore, for applications filed before March 16, 2013, or patents issuing from such applications, an interference proceeding can be provoked bya third party, or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications and patents. Asof March 16, 2013, the United States transitioned to a “first-to-file” system for deciding which party should be granted a patent when two or more patent applications arefiled by different parties claiming the same invention. A third party that files a patent application in the USPTO before us could therefore be awarded a patent covering aninvention of ours even if we had made the invention before it was made by the third party. The change to “first-to-file” from “first-to-invent” is one of the changes to thepatent laws of the United States resulting from the Leahy-Smith America Invents Act signed into law on September 16, 2011. Among some of the other changes to thepatent laws are changes that limit where a patentee may file a patent infringement suit and providing opportunities for third parties to challenge any issued patent in theUSPTO.Even where laws provide protection, costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and theoutcome of such litigation would be uncertain. Moreover, any actions we may bring to enforce our intellectual property against our competitors could provoke them to bringcounterclaims against us, and some of our competitors have substantially greater intellectual property portfolios than we have.We also rely on trade secret protection and confidentiality agreements to protect proprietary know-how that may not be patentable, processes for which patents maybe difficult to obtain or enforce and any other elements of our product development processes that involve proprietary know-how, information or technology that is notcovered by patents.43Table of ContentsIn an effort to protect our trade secrets and other confidential information, we require our employees, consultants, collaborators and advisors to execute confidentialityagreements upon the commencement of their relationships with us. These agreements require that all confidential information developed by the individual or made knownto the individual by us during the course of the individual’s relationship with us be kept confidential and not disclosed to third parties. These agreements, however, may notprovide us with adequate protection against improper use or disclosure of confidential information, and these agreements may be breached. Adequate remedies may notexist in the event of unauthorized use or disclosure of our confidential information. A breach of confidentiality could significantly affect our competitive position. Inaddition, in some situations, these agreements may conflict with, or be subject to, the rights of third parties with whom our employees, consultants, collaborators or advisorshave previous employment or consulting relationships. To the extent that our employees, consultants or contractors use any intellectual property owned by others in theirwork for us, disputes may arise as to the rights in any related or resulting know-how and inventions. Also, others may independently develop substantially equivalentproprietary information and techniques or otherwise gain access to our trade secrets and other confidential information.If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed.Our research, development and commercialization activities may infringe or otherwise violate or be claimed to infringe or otherwise violate patents owned orcontrolled by other parties. Competitors in the field of cosmetics, pharmaceuticals and botulinum toxin have developed large portfolios of patents and patent applications infields relating to our business. For example, there are patents held by third parties that relate to the treatment with botulinum toxin-based products for indications we arecurrently developing. There may also be patent applications that have been filed but not published that, when issued as patents, could be asserted against us. These thirdparties could bring claims against us that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if apatent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate thatis the subject of the suit.As a result of patent infringement claims, or to avoid potential claims, we may choose or be required to seek licenses from third parties. These licenses may not beavailable on acceptable terms, or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rightsgranted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented fromcommercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable toenter into licenses on acceptable terms.There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical industry. In addition toinfringement claims against us, we may become a party to other patent litigation and other proceedings, including interference, derivation or post-grant proceedingsdeclared or granted by the USPTO and similar proceedings in foreign countries, regarding intellectual property rights with respect to our current or future products. The costto us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of suchlitigation or proceedings more effectively than we can because of their substantially greater financial resources. Patent litigation and other proceedings may also absorbsignificant management time. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in themarketplace. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition or results of operations.We may become involved in lawsuits to protect or enforce our patents or other intellectual property or the patents of our licensors, which could be expensive andtime-consuming.Competitors may infringe our intellectual property, including our patents or the patents of our licensors. As a result, we may be required to file infringement claims tostop third-party infringement or unauthorized use. This can be expensive, particularly for a company of our size, and time-consuming. In addition, in an infringementproceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the groundsthat our patent claims do not cover its technology or that the factors necessary to grant an injunction against an infringer are not satisfied.An adverse determination of any litigation or other proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could putour patent applications at risk of not issuing.44Table of ContentsInterference, derivation, inter partes review, post-grant review or other proceedings brought at the USPTO may be necessary to determine the priority or patentabilityof inventions with respect to our patents or patent applications or those of our licensors or collaborators. Litigation or USPTO proceedings brought by us may fail or may beinvoked against us by third parties. Even if we are successful, domestic or foreign litigation or USPTO or foreign patent office proceedings may result in substantial costsand distraction to our management. We may not be able, alone or with our licensors or collaborators, to prevent misappropriation of our proprietary rights, particularly incountries where the laws may not protect such rights as fully as in the United States.Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or other proceedings, there is a risk that someof our confidential information could be compromised by disclosure during this type of litigation or proceedings. In addition, during the course of this kind of litigation orproceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or public access to related documents. Ifinvestors perceive these results to be negative, the market price for our common stock could be significantly harmed.We may not be able to protect our intellectual property rights throughout the world.Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual propertyrights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protectintellectual property rights to the same extent as federal and state laws in the United States and in some cases may even force us to grant a compulsory license tocompetitors or other third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or fromselling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where wehave not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, butwhere enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may notbe effective or sufficient to prevent them from competing.Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certaincountries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating tobiotechnology, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rightsgenerally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of ourbusiness, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assertclaims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectualproperty that we develop or license.In addition, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in domestic and foreign intellectualproperty laws.Risks Related to Government RegulationOur business and products are subject to extensive government regulation.We are subject to extensive, complex, costly and evolving regulation by federal and state governmental authorities in the United States, principally by the FDA, theU.S. Drug Enforcement Administration, or DEA, the CDC, and foreign regulatory authorities. Failure to comply with all applicable regulatory requirements, including thosepromulgated under the Federal Food, Drug, and Cosmetic Act, or FFDCA, the Public Health Service Act, or PHSA, and Controlled Substances Act, may subject us tooperating restrictions and criminal prosecution, monetary penalties and other disciplinary actions, including, sanctions, warning letters, product seizures, recalls, fines,injunctions, suspension, revocation of approvals, or exclusion from future participation in the Medicare and Medicaid programs.45Table of ContentsAfter our products receive regulatory approval or clearance, we, and our direct and indirect suppliers, remain subject to the periodic inspection of our plants andfacilities, review of production processes, and testing of our products to confirm that we are in compliance with all applicable regulations. Adverse findings duringregulatory inspections may result in the implementation of Risk Evaluation and Mitigation Strategies, or REMS, programs, completion of government mandated clinicaltrials, and government enforcement action relating to labeling, advertising, marketing and promotion, as well as regulations governing manufacturing controls noted above.The regulatory approval process is highly uncertain and we may not obtain regulatory approval for the commercialization of RT001 topical, RT002 injectable orany future product candidates.The research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of drug and biologic products are subject to extensiveregulation by the FDA and other regulatory authorities in the United States and other countries, which regulations differ from country to country. Neither we nor anycollaboration partner is permitted to market RT001 topical, RT002 injectable or any future product candidates in the United States until we receive approval of a BLA fromthe FDA. We have not submitted an application or obtained marketing approval for RT001 topical or RT002 injectable anywhere in the world. Obtaining regulatoryapproval of a BLA can be a lengthy, expensive and uncertain process. In addition, failure to comply with FDA and other applicable U.S. and foreign regulatoryrequirements may subject us to administrative or judicially imposed sanctions or other actions, including: •warning letters;•civil and criminal penalties;•injunctions;•withdrawal of approved products;•product seizure or detention;•product recalls;•total or partial suspension of production; and•refusal to approve pending BLAs or supplements to approved BLAs.Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we or our collaborators must demonstrate with substantial evidencefrom well controlled clinical trials, and to the satisfaction of the FDA or other foreign regulatory agencies, that such product candidates are safe and effective for theirintended uses. Results from preclinical studies and clinical trials can be interpreted in different ways. Even if we and our collaborator believe the preclinical or clinical datafor our product candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. Administering product candidatesto humans may produce undesirable side effects, which could interrupt, delay or halt clinical trials and result in the FDA or other regulatory authorities denying approval ofa product candidate for any or all targeted indications.Regulatory approval of a BLA or BLA supplement is not guaranteed, and the approval process is expensive and may take several years. The FDA also has substantialdiscretion in the approval process. Despite the time and expense expended, failure can occur at any stage, and we could encounter problems that cause us to abandon orrepeat clinical trials, or perform additional preclinical studies and clinical trials. The number of preclinical studies and clinical trials that will be required for FDA approvalvaries depending on the product candidate, the disease or condition that the product candidate is designed to address and the regulations applicable to any particular productcandidate. The FDA can delay, limit or deny approval of a product candidate for many reasons, including the following: •a product candidate may not be deemed safe, effective, pure or potent;•FDA officials may not find the data from preclinical studies and clinical trials sufficient;•the FDA might not approve our third-party manufacturers’ processes or facilities; or•the FDA may change its approval policies or adopt new regulations.If RT001 topical, RT002 injectable or any future product candidates fail to demonstrate safety and efficacy in clinical trials or do not gain approval, our business andresults of operations will be materially and adversely harmed.46Table of ContentsEven if we receive regulatory approval for RT001 topical, RT002 injectable or any future product candidates, we will be subject to ongoing regulatory obligationsand continued regulatory review, which may result in significant additional expense, limit or delay regulatory approval and subject us to penalties if we fail tocomply with applicable regulatory requirements.Once regulatory approval has been granted, RT001 topical, RT002 injectable, or any approved product will be subject to continual regulatory review by the FDAand/or non-U.S. regulatory authorities. Additionally, any product candidates, if approved, will be subject to extensive and ongoing regulatory requirements, includinglabeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipatedproblems with our products.Any regulatory approvals that we or our collaborators receive for RT001 topical, RT002 injectable or any future product candidates may also be subject to limitationson the approved indications for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing,including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate. In addition, if the applicable regulatory agency approvesRT001 topical, RT002 injectable or any future product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage,advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions ofsafety and other post-marketing information and reports, registration, as well as continued compliance with cGMP and GCP for any clinical trials that we conduct post-approval. Later discovery of previously unknown problems with RT001 topical, RT002 injectable or any future product candidates, including adverse events ofunanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in,among other things: •restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;•fines, warning letters or holds on clinical trials;•refusal by the FDA to approve pending applications or supplements to approved applications filed by us or our strategic collaborators, or suspension orrevocation of product license approvals;•product seizure or detention, or refusal to permit the import or export of products; and•injunctions or the imposition of civil or criminal penalties.Our ongoing regulatory requirements may also change from time to time, potentially harming or making costlier our commercialization efforts. We cannot predict thelikelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or other countries. If we areslow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we maylose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business.If we fail to obtain regulatory approvals in foreign jurisdictions for RT001 topical, RT002 injectable or any future product candidates, we will be unable tomarket our products outside of the United States.In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing manufacturing, clinical trials, commercial sales anddistribution of our future products. Whether or not we obtain FDA approval for a product candidate, we must obtain approval of the product by the comparable regulatoryauthorities of foreign countries before commencing clinical trials or marketing in those countries. The approval procedures vary among countries and can involve additionalclinical testing, and the time required to obtain approval may differ from that required to obtain FDA approval. Clinical trials conducted in one country may not be acceptedby regulatory authorities in other countries. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one or more foreignregulatory authorities does not ensure approval by regulatory authorities in other foreign countries or by the FDA. The foreign regulatory approval process may include allof the risks associated with obtaining FDA approval. We may not be able to file for regulatory approvals or to do so on a timely basis, and even if we do file, we may notreceive the necessary approvals to commercialize our products in markets outside of the United States.47Table of ContentsIf approved, RT001 topical, RT002 injectable or any future products may cause or contribute to adverse medical events that we are required to report toregulatory agencies and if we fail to do so, we could be subject to sanctions that would materially harm our business.Some participants in our clinical trials have reported adverse events after being treated with RT001 topical or RT002 injectable. If we are successful incommercializing RT001 topical, RT002 injectable, or any other products, the FDA and foreign regulatory agency regulations require that we report certain informationabout adverse medical events if those products may have caused or contributed to those adverse events. The timing of our obligation to report would be triggered by the datewe become aware of the adverse event as well as the nature of the event. We may fail to report adverse events we become aware of within the prescribed timeframe. Wemay also fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event thatis unexpected or removed in time from the use of our products. If we fail to comply with our reporting obligations, the FDA or a foreign regulatory agency could take actionincluding criminal prosecution, the imposition of civil monetary penalties, seizure of our products, or delay in approval or clearance of future products.We may in the future be subject to various U.S. federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback, self-referral, false claimsand fraud laws, and any violations by us of such laws could result in fines or other penalties.While we do not expect that RT001 topical, if approved for the treatment of crow’s feet, or RT002 injectable, if approved for the treatment of glabellar lines, willsubject us to the various U.S. federal and state laws intended to prevent healthcare fraud and abuse, we may in the future become subject to such laws. The federal anti-kickback statute prohibits the offer, receipt, or payment of remuneration in exchange for or to induce the referral of patients or the use of products or services that would bepaid for in whole or part by Medicare, Medicaid or other federal healthcare programs. Remuneration has been broadly defined to include anything of value, including cash,improper discounts, and free or reduced price items and services. Many states have similar laws that apply to their state healthcare programs as well as private payors.Violations of the anti-kickback laws can result in exclusion from federal healthcare programs and substantial civil and criminal penalties.The federal False Claims Act, or FCA, imposes liability on persons who, among other things, present or cause to be presented false or fraudulent claims for paymentby a federal healthcare program. The FCA has been used to prosecute persons submitting claims for payment that are inaccurate or fraudulent, that are for services notprovided as claimed, or for services that are not medically necessary. The FCA includes a whistleblower provision that allows individuals to bring actions on behalf of thefederal government and share a portion of the recovery of successful claims. If our marketing or other arrangements were determined to violate anti-kickback or relatedlaws, including the FCA, then our revenues could be adversely affected, which would likely harm our business, financial condition, and results of operations.State and federal authorities have aggressively targeted medical technology companies for alleged violations of these anti-fraud statutes, based on improper researchor consulting contracts with doctors, certain marketing arrangements that rely on volume-based pricing, off-label marketing schemes, and other improper promotionalpractices. Companies targeted in such prosecutions have paid substantial fines in the hundreds of millions of dollars or more, have been forced to implement extensivecorrective action plans, and have often become subject to consent decrees severely restricting the manner in which they conduct their business. If we become the target ofsuch an investigation or prosecution based on our contractual relationships with providers or institutions, or our marketing and promotional practices, we could face similarsanctions, which would materially harm our business.Also, the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improperpayments to non-U.S. officials for the purpose of obtaining or retaining business. We cannot assure you that our internal control policies and procedures will protect us fromreckless or negligent acts committed by our employees, future distributors, partners, collaborators or agents. Violations of these laws, or allegations of such violations, couldresult in fines, penalties or prosecution and have a negative impact on our business, results of operations and reputation.48Table of ContentsLegislative or regulatory healthcare reforms in the United States may make it more difficult and costly for us to obtain regulatory clearance or approval of RT001topical, RT002 injectable or any future product candidates and to produce, market, and distribute our products after clearance or approval is obtained.From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulatory clearance orapproval, manufacture, and marketing of regulated products or the reimbursement thereof. In addition, FDA regulations and guidance are often revised or reinterpreted bythe FDA in ways that may significantly affect our business and our products, as discussed in more detail in the risk factors in Part II, Item 1A of our Form 10-Q entitled"We may be unable to obtain regulatory approval for RT001 topical, RT002 injectable or future product candidates under applicable regulatory requirements. The denial ordelay of any such approval would delay commercialization and have a material adverse effect on our potential to generate revenue, our business and our results ofoperations." Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of RT001 topical, RT002injectable or any future product candidates. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated,enacted or adopted may have on our business in the future. Such changes could, among other things, require: •changes to manufacturing methods;•recall, replacement, or discontinuance of one or more of our products; and•additional recordkeeping.Each of these would likely entail substantial time and cost and could materially harm our business and our financial results. In addition, delays in receipt of or failureto receive regulatory clearances or approvals for any future products would harm our business, financial condition, and results of operations.Risks Related to the Ownership of Our Common StockThe trading price of our common stock is volatile, and purchasers of our common stock could incur substantial losses.The trading price of our common stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond ourcontrol. The stock markets in general and the markets for pharmaceutical biopharmaceutical and biotechnology stocks in particular have experienced extreme volatility thatmay have been for reasons that are related or unrelated to the operating performance of the issuer. The market price for our common stock may be influenced by manyfactors, including: •regulatory or legal developments in the United States and foreign countries;•results from or delays in clinical trials of our product candidates, including our Phase 3 clinical program for RT001 topical and our Phase 2 clinical programfor RT002 injectable;•announcements of regulatory approval or disapproval of RT001 topical, RT002 injectable or any future product candidates;•FDA or other U.S. or foreign regulatory actions or guidance affecting us or our industry;•introductions and announcements of new products by us, any commercialization partners or our competitors, and the timing of these introductions andannouncements;•variations in our financial results or those of companies that are perceived to be similar to us;•changes in the structure of healthcare payment systems;•announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, joint ventures or capital commitments;•market conditions in the pharmaceutical and biotechnology sectors and issuance of securities analysts’ reports or recommendations;•quarterly variations in our results of operations or those of our future competitors;•changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;•sales of substantial amounts of our stock by insiders and large stockholders, or the expectation that such sales might occur;•general economic, industry and market conditions;•additions or departures of key personnel;•intellectual property, product liability or other litigation against us;49Table of Contents•expiration or termination of our potential relationships with customers and strategic partners; and•other factors described in this “Risk Factors” section.These broad market fluctuations may adversely affect the trading price or liquidity of our common stock. In addition, in the past, stockholders have initiated classactions against pharmaceutical companies, including us, following periods of volatility in their stock prices. Such litigation instituted against us could cause us to incursubstantial costs and divert management’s attention and resources.If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.As a smaller company, it may be difficult for us to attract or retain the interest of equity research analysts. A lack of research coverage may adversely affect theliquidity of and market price of our common stock. We will not have any control of the equity research analysts or the content and opinions included in their reports. Theprice of our stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equityresearch analysts ceases coverage of our company, or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause our stock priceor trading volume to decline.Sales of substantial amounts of our common stock in the public markets, or the perception that such sales might occur, could cause the market price of ourcommon stock to drop significantly, even if our business is doing well.Sales of a substantial number of shares of our common stock in the public market could occur at any time. On March 4, 2015, we entered into the ATM agreement,with Cowen, under which we may offer and sell our common stock having aggregate sales proceeds of up to $50.0 million from time to time through our sales agent. As ofDecember 31, 2015 , common stock for aggregate gross proceeds of $39.2 million remained available to be sold under this facility, subject to certain conditions as specifiedin the ATM agreement.If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, the market price ofour common stock could decline significantly.On October 16, 2015, we filed a shelf registration statement on Form S-3, registering the resale of the 8,414,711 shares held by certain selling stockholders identifiedtherein. The shares covered thereby may be offered from time to time by the selling stockholders. As of December 31, 2015 , these selling stockholders and certain otherholders are entitled to rights with respect to the registration of their shares under the Securities Act of 1933, as amended, or the Securities Act, pursuant to the Amended andRestated Investor Rights Agreement, effective as of February 5, 2014, among our company and certain stockholders. Any sales of securities by these stockholders couldhave a material adverse effect on the trading price of our common stock.Provisions in our corporate charter documents and under Delaware law could discourage takeover attempts and lead to management entrenchment, and themarket price of our common stock may be lower as a result.Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws may make it difficult for a third party to acquire, orattempt to acquire, control of our company, even if a change in control was considered favorable by you and other stockholders. For example, our board of directors has theauthority to issue up to 5,000,000 shares of preferred stock. Our board of directors can fix the price, rights, preferences, privileges, and restrictions of the preferred stockwithout any further vote or action by our stockholders. The issuance of shares of preferred stock may delay or prevent a change in control transaction. As a result, themarket price of our common stock and the voting and other rights of our stockholders may be adversely affected. An issuance of shares of preferred stock may result in theloss of voting control to other stockholders.Our charter documents also contain other provisions that could have an anti-takeover effect, including: •only one of our three classes of directors will be elected each year;•no cumulative voting in the election of directors;•the ability of our board of directors to issues shares of preferred stock and determine the price and other terms of those shares, including preferences andvoting rights, without stockholder approval;•the exclusive right of our board of directors to elect a director to fill a vacancy or newly created directorship;•stockholders will not be permitted to take actions by written consent;50Table of Contents•stockholders cannot call a special meeting of stockholders;•stockholders must give advance notice to nominate directors or submit proposals for consideration at stockholder meetings;•the ability of our board of directors, by a majority vote, to amend the bylaws; and•the requirement for the affirmative vote of at least 66 2/3% or more of the outstanding common stock to amend many of the provisions described above.In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which regulates corporate acquisitions. Theseprovisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouragingothers from making tender offers for our common stock, including transactions that may be in your best interests. These provisions may also prevent changes in ourmanagement or limit the price that certain investors are willing to pay for our stock.Our amended and restated certificate of incorporation also provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantiallyall disputes between us and our stockholders.Insiders have substantial control over us, which could limit your ability to influence the outcome of key transactions, including a change of control.As of December 31, 2015 , our directors, executive officers and each of our stockholders who own greater than 5% of our outstanding common stock and theiraffiliates, in the aggregate, beneficially owned approximately 64.6% of our common stock. As a result, these stockholders, if acting together, would be able to influence orcontrol matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions.They may have interests that differ from yours and may vote in a way with which you disagree and that may be adverse to your interests. This concentration of ownershipmay have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for theircommon stock as part of a sale of our company and might affect the market price of our common stock.Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce theamount of money available to us.Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to thefullest extent permitted by Delaware law.In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that wehave entered into with our directors and officers provide that: •We will indemnify our directors and officers for serving us in those capacities, or for serving other business enterprises at our request, to the fullest extentpermitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner suchperson reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable causeto believe such person’s conduct was unlawful.•We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.•We are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors orofficers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.•We will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us orour other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification.•The rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors,officers, employees and agents and to obtain insurance to indemnify such persons.•We may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees andagents.51Table of ContentsBecause we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be your sole source ofgains.We have not declared or paid cash dividends on our common stock to date. We currently intend to retain our future earnings, if any, to fund the development andgrowth of our business. In addition, the terms of any existing or future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, ofour common stock will be your sole source of gain for the foreseeable future.We are an “emerging growth company,” and if we decide to comply only with reduced disclosure requirements applicable to emerging growth companies, ourcommon stock could be less attractive to investors.We are an “emerging growth company,” as defined in the JOBS Act and, for as long as we continue to be an “emerging growth company,” we may choose to takeadvantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including not being requiredto comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation inour periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholderapproval of any golden parachute payments not previously approved. We will remain an “emerging growth company” until the earlier of (1) the last day of the fiscal year(a) following the fifth anniversary of the closing of our IPO, (b) in which we have total annual gross revenues of over $1.0 billion or (c) in which we are deemed to be alarge accelerated filer, which means the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on whichwe have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We cannot predict if investors will find our common stock less attractive ifwe choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a lessactive trading market for our common stock and our stock price may be more volatile.Under the JOBS Act, emerging growth companies that become public can delay adopting new or revised accounting standards until such time as those standardsapply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will besubject to the same new or revised accounting standards as other public companies that are not emerging growth companies.52Table of ContentsITEM 1B.UNRESOLVED STAFF COMMENTSNone.53Table of ContentsITEM 2.PROPERTIESOur headquarters is located in Newark, California, where we occupy approximately 90,000 square feet of office, laboratory and manufacturing space. The currentterm of our lease expires in January 2025. We have an option to extend the lease for two additional terms of seven years, which would extend our lease through January2039. We believe that our current facilities are adequate for our needs and for the immediate future and that, should it be needed, additional space can be leased toaccommodate any future growth.54Table of ContentsITEM 3.LEGAL PROCEEDINGSFrom time to time, we may be involved in litigation relating to claims arising out of our operations. On May 1, 2015, a securities class action complaint, captioned City ofWarren Police and Fire Retirement System v. Revance Therapeutics Inc., et al., CIV 533635, was filed on behalf of City of Warren Police and Fire Retirement System inthe Superior Court for San Mateo County, California against us and certain of our directors and executive officers at the time of our June 2014 follow-on public offering,and the investment banking firms that acted as the underwriters in such follow-on public offering.In general, the complaint alleges that the defendants misrepresented the then-present status of our RT001 topical clinical program and made false and misleading statementsregarding the formulation, manufacturing and efficacy of RT001 topical, for the treatment of lateral canthal lines at the time of our follow-on public offering. The complainthas been brought as a purported class action on behalf of those who purchased our common stock in such follow-on public offering and seeks unspecified monetarydamages and other relief. On October 5, 2015, we made a motion for transfer of the action to the Superior Court for the County of Santa Clara on the basis that venue wasimproper in San Mateo County. Plaintiff’s counsel did not oppose the transfer motion, and the action was received by Santa Clara Superior Court on November 6, 2015 andassigned the following case number, 15-CV-287794. We believe that the class action is without merit and intend to vigorously defend the action. Nevertheless, this litigation, as any other litigation, is subject to uncertainty andthere can be no assurance that this litigation will not have a material adverse effect on our business, results of operations, financial position or cash flows.Except as provided above, we are not currently involved in any material legal proceedings.55Table of ContentsITEM 4.MINE SAFETY DISCLOSURESNot applicable.56Table of ContentsPART IIITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIESOur common stock has been trading on The Nasdaq Global Market under the symbol “RVNC” since our IPO on February 6, 2014. Prior to this date, there was nopublic market for our common stock. On March 3, 2016, the closing price of our common stock as reported on the NASDAQ Global Market was $20.06 per share. Thefollowing table sets forth the high and low sales prices per share of our common stock on the NASDAQ Global Market for the quarterly periods indicated. High Low2015 First Quarter$21.35 $14.10Second Quarter$35.72 $19.25Third Quarter$33.71 $24.82Fourth Quarter$42.41 $25.57 2014 First Quarter (from February 6, 2014 to March 31, 2014)$39.86 $21.00Second Quarter$36.98 $25.06Third Quarter$34.01 $18.82Fourth Quarter$21.14 $14.02Holders of RecordsAs of March 2, 2016, there were approximately 46 holders of record of our common stock.Dividend PolicyWe have never declared or paid any cash dividend on our common stock. We currently anticipate that we will retain future earnings for the development, operationand expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any determination to pay dividends in the future willbe at the discretion of our board of directors and will be dependent on a number of factors, including our earnings, capital requirements, overall financial conditions,business prospects, contractual restrictions and other factors our board of directors may deem relevant.Stock Price Performance GraphThis performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of our filings under theSecurities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.57Table of Contents This graph compares, for the period ended December 31, 2015, the cumulative total return on our common stock, the NASDAQ Biotechnology Index (NBI) and theNASDAQ Composite Index (CCMP). The graph assumes $100 was invested on February 6, 2014, in our common stock, the NBI and CCMP, and assumes the reinvestmentof any dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.Company/Index2/6/20143/31/20146/30/20149/30/201412/31/20143/31/20156/30/20159/30/201512/31/2015Revance Therapeutics, Inc.$100.00$117.32$126.63$71.99$63.09$77.21$119.11$110.84$127.23NASDAQ Biotechnology Index$100.00$99.80$108.67$115.72$128.67$145.74$156.71$128.61$143.81NASDAQ Composite Index$100.00$103.67$109.18$111.62$117.98$122.45$124.94$116.08$126.20Recent Sales of Unregistered SecuritiesDuring 2015, we made the following sales of unregistered securities:On December 11, 2015, Leader Equity, LLC net exercised a warrant to purchase 34,113 shares into 20,492 shares of common stock at an exercise price of $14.95.On December 7, 2015, Hercules Technology Growth Capital, Inc. net exercised a warrant to purchase 53,511 shares into 22,765 shares of common stock at anexercise price of $22.43.On November 19, 2015, Essex Capital Corporation net exercised a warrant to purchase 24,753 shares into 15,754 shares of common stock at an exercise price of$14.40.On November 5, 2015, Essex Capital Corporation net exercised a warrant to purchase 24,690 shares into 9,982 shares of common stock at an exercise price of $20.25.The issuance of the security described in the above paragraph was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of theSecurities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipient of the security acquired it for investmentonly and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the security. The recipient of the security was anaccredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.58Table of ContentsUse of ProceedsThere has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC pursuant to Rule 424(b) onFebruary 6, 2014. As of December 31, 2015, we have used all of the proceeds from our IPO for working capital and general corporate purposes.59Table of ContentsITEM 6.SELECTED FINANCIAL DATAThe information set forth below for the five years ended December 31, 2015 is not necessarily indicative of results of future operations, and should be read inconjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , and the Consolidated Financial Statements and relatednotes thereto included in Item 8, Consolidated Financial Statements and Supplementary Data , of this Form 10-K to fully understand the factors that may affect thecomparability of the information presented below.SELECTED CONSOLIDATED FINANCIAL DATA(In thousands, except share and per share data) Year Ended December 31, 2015 2014 2013 2012 2011Consolidated Statements of Operations Data: Revenue$300 $383 $617 $717 $557Total operating expenses$72,617 $52,433 $38,842 $43,903 $28,290Loss from operations$(72,317) $(52,050) $(38,225) $(43,186) $(27,738)Interest expense$(1,190) $(10,672) $(15,164) $(28,959) $(17,790)Net and comprehensive loss$(73,476) $(62,917) $(52,448) $(58,259) $(44,863)Net income (loss) attributable to common stockholders: Basic (1)$(73,476) $(62,917) $258 $(58,259) $(44,863)Diluted (1)$(73,476) $(62,917) $1,083 $(58,259) $(44,863)Net income (loss) per share attributable to common stockholders: Basic (1)$(3.02) $(3.24) $1.17 $(290.48) $(226.06)Diluted (1)$(3.02) $(3.24) $1.05 $(290.48) $(226.06)Weighted-average number of shares used in computing net income(loss) per share attributable to common stockholders: Basic (1)24,340,466 19,391,523 220,220 200,560 198,456Diluted (1)24,340,466 19,391,523 1,029,150 200,560 198,456(1)Net income per share for all periods presented reflects the one-for-fifteen reverse stock split effected on February 3, 2014. As of December 31, 2015 2014 2013 2012 2011Consolidated Balance Sheet Data: Cash and cash equivalents$201,615 $171,032 $3,914 $4,083 $29,621Working capital surplus (deficit)$241,926 $162,495 $(42,747) $(112,530) $21,264Total assets$275,822 $192,469 $22,645 $13,423 $39,928Capital lease, net of current portion$— $— $— $5 $944Convertible notes, net of current portion$— $— $— $— $45,062Note payable, net of current portion$— $— $2,632 $10,995 $18,430Financing obligation, net of current portion$5,346 $598 $— $— $—Convertible preferred stock$— $— $123,982 $95,433 $95,433Accumulated deficit$(332,273) $(258,797) $(195,880) $(218,326) $(160,067)60Table of ContentsITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand ourresults of operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our audited Consolidated FinancialStatements and the accompanying notes to the Consolidated Financial Statements and other disclosures included in this Annual Report on this Form 10-K (including thedisclosures under “Item 1A. Risk Factors”). Our Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principlesand are presented in U.S. dollars.61Table of ContentsOverviewRevance Therapeutics, Inc. is a clinical-stage biotechnology company focused on the development, manufacturing, and commercialization of novel botulinum toxinproducts for multiple aesthetic and therapeutic indications. We are leveraging our proprietary portfolio of botulinum toxin type A compounds, combined with our patentedTransMTS® peptide delivery system, to address unmet needs in large and growing neurotoxin markets. Our proprietary TransMTS technology enables delivery ofbotulinum toxin type A through two investigational drug product candidates, DaxibotulinumtoxinA Topical Gel (RT001), or RT001 topical, and DaxibotulinumtoxinA forInjection (RT002), or RT002 injectable. We are pursuing clinical development for RT001 topical and RT002 injectable in a broad spectrum of aesthetic and therapeuticindications. Neither formulation of our product candidates contains albumin or any other animal or human-derived materials. We believe this reduces the risk of thetransmission of certain viral diseases. We hold worldwide rights for all indications of RT001 topical, RT002 injectable, and our TransMTS technology platform.RT001 topical has the potential to be the first commercially available non-injectable formulation of botulinum toxin type A. We are studying RT001 topical foraesthetic indications, such as crow's feet, and therapeutic indications, such as axillary hyperhidrosis and chronic migraine headache. RT002 injectable is a novel, injectableformulation of botulinum toxin type A designed to be a targeted and long-lasting injectable botulinum toxin treatment. We are studying RT002 injectable for aestheticindications, such as glabellar (frown) lines and therapeutic indications, such as cervical dystonia. We believe both product candidates have the potential to expand intoadditional aesthetic and therapeutic indications in the future.DaxibotulinumtoxinA for Injection (RT002) or RT002 InjectableWe are developing RT002 injectable, and plan to commercialize RT002 for indications where deep delivery of the botulinum toxin is required and a long-lastingeffect is desired. We believe RT002 injectable may provide targeted delivery of botulinum toxin to intended treatment sites, while potentially reducing the unwanted spreadof botulinum toxin to adjacent areas. We believe, and our preclinical and clinical studies indicate, that this targeted delivery, enabled by our proprietary peptide technology,may permit safe administration of higher doses of botulinum toxin and may result in long-lasting effect.Based upon the results to date, we are further developing RT002 injectable for the treatment of glabellar lines. We tested RT002 in a four-cohort, dose escalating,open-label Phase 1/2 clinical trial outside of the United States for the treatment of glabellar lines. Data from this clinical trial indicated that RT002 appears to be well-tolerated and met efficacy endpoints at all four doses. We also reported duration of effect of seven months from the last cohort of this trial, the only cohort for whichduration of effect was measured. In December 2014, we initiated our BELMONT trial, a Phase 2, active comparator, placebo-controlled clinical trial for the treatment ofglabellar lines against the market leader BOTOX® Cosmetic. The topline interim data from the trial, which we reported in October 2015, showed that RT002 injectableachieved its primary efficacy measurement at four weeks for all doses of RT002 injectable and that such efficacy was highly statistically significant as compared to placebo.In addition, the 40 Unit dose of RT002 injectable demonstrated a 23.6-week median duration versus BOTOX® Cosmetic with an 18.8-week median duration. Across allcohorts, RT002 injectable appeared to be generally safe and well-tolerated. We plan to conduct an End-of-Phase 2 meeting with the FDA in the first half of 2016. We thenexpect to begin Phase 3 clinical studies of RT002 injectable for the treatment of glabellar lines in the second half of 2016. If approved, we believe RT002 injectable has thepotential to satisfy significant unmet needs in this market.We have also initiated a Phase 2 dose-escalating, open-label clinical study of RT002 injectable in the therapeutic indication of cervical dystonia, a muscle movementdisorder. The Phase 2 study will evaluate safety, preliminary efficacy, and duration of effect of RT002 in subjects with moderate-to-severe isolated cervical dystoniasymptoms of the neck. We completed enrollment in the first cohort and expect to release interim results in the first half of 2016.DaxibotulinumtoxinA Topical Gel (RT001) or RT001 TopicalWe are developing and plan to commercialize RT001 topical for indications where topical application provides a meaningful advantage over injectable administration.We are evaluating RT001 topical in a broad clinical program that includes aesthetic indications such as lateral canthal lines and therapeutic indications such ashyperhidrosis. RT001 topical has the potential to be the first approved non-injectable botulinum toxin product for the treatment of crow's feet. RT001 topical is designed tohave several such advantages, including painless topical administration, no bruising, ease of use and limited62Table of Contentsdependence on administration technique by physicians and medical staff. We believe these potential advantages may improve the experience of patients undergoingbotulinum toxin procedures and make RT001 topical suitable for multiple indications.The first indications we are pursuing are in the fields of dermatology and plastic surgery. If approved, we believe RT001 topical can expand the overall botulinumtoxin aesthetic market by appealing to new patients who would prefer a needle-free approach to treatment. The aesthetic dermatology market is attractive because webelieve that patients in this market tend to be open to trying new products and are willing to pay for aesthetic procedures out of pocket, reducing reliance on reimbursement.We are focused on this market not only because of its size and growth potential but also because, in the United States and Europe, this market can be accessed by a specialtysales force and distributor network.We are in a Phase 3 development program of RT001 topical in North America for the treatment of crow's feet. During the third quarter of 2015, we initiated REALISE1, a pivotal Phase 3 clinical trial designed to evaluate the safety and efficacy of a single, bilateral administration of RT001 topical compared to placebo in subjects withmoderate to severe crow's feet. We expect to report efficacy data from this study in the first half of 2016, and if successful, will need to conduct additional Phase 3 studiesin order to submit our Biologics License Application, BLA, to the FDA. To date, we have conducted seventeen clinical trials with RT001 topical for the treatment of crow'sfeet, with a total of over 1,600 subjects. We are also developing RT001 topical for therapeutic applications where botulinum toxin has shown efficacy and that are particularly well suited for needle-freetreatments. We have completed initial Phase 2 clinical trials for the treatment of primary axillary hyperhidrosis, and for the prevention of chronic migraine headache. InSeptember 2015, we initiated an additional randomized, double-blinded, dose-ranging, placebo-controlled Phase 2 clinical trial designed to evaluate the safety and efficacyof a single, bilateral application of RT001 topical for the treatment of primary axillary hyperhidrosis. This trial evaluated efficacy of two different doses of RT001 ascompared to placebo. In December 2015, we reported positive interim results and, although the trial sample size was not chosen to meet statistical significance, usingquantitative gravimetric measurements, the data was positive and showed that a single treatment of RT001 topical gel achieved clinically meaningful efficacy at Week 4. Onthe primary quantitative assessment of average reduction from baseline in gravimetrically-measured sweat production at Week 4, the results ranged from 214.2 mg to 165.7mg (p=0.003 for the higher dose) per five minutes for RT001, compared to 66.3 mg per five minutes in patients who received placebo. These ranges corresponded to 81.1%to 79.6% change for RT001, compared to 54.6% for placebo. On the primary qualitative efficacy assessment of a 2-point or greater responders from baseline using theHyperhidrosis Disease Severity Scale, or HDSS, at Weeks 1 and 2 the results ranged from a 23.8% to 13.3 % improvement for RT001 compared to 11.8% at Week 1 and17.6% at Week 2 for placebo. By Week 4, there was a 14.3% to 13.3% improvement for RT001, compared to a 29.4% improvement in patients who received placebo. Theclinical study indicated that RT001 topical appeared to be well-tolerated with no serious adverse events related to the study drug or study treatment procedures or othersafety concerns. We plan to advance RT001 topical into a larger Phase 2 study for the treatment of hyperhidrosis in 2016, which will be designed to confirm a final dose.Upon successful completion of this study, we plan to meet with the FDA to discuss moving forward into Phase 3 studies. Since commencing operations in 2002, we have devoted substantially all our efforts to identifying and developing our product candidates for the aesthetic andtherapeutic markets, recruiting personnel, raising capital, and preclinical and clinical development of, and manufacturing capabilities for, RT001 topical and RT002injectable. We have retained all rights to develop and commercialize RT001 topical and RT002 injectable worldwide. We have not filed for approval with the U.S. Food andDrug Administration, or FDA, for the commercialization of RT001 topical or RT002 injectable, and we have not generated any revenue from product sales for RT001topical or RT002 injectable.Through December 31, 2015 , we have funded substantially all of our operations through the sale and issuance of our common stock, preferred stock, venture debt andconvertible debt. On November 9, 2015, we completed a follow-on public offering, pursuant to which we issued 3,737,500 shares of common stock at 36.00 per share,including the exercise of the underwriters’ option to purchase 487,500 additional shares of common stock, for net proceeds of $126.2 million , after underwriting discounts,commissions and other offering expenses. In March 2015, we entered into an At-The-Market, ATM, sales agreement, or the ATM agreement, with Cowen and Company,LLC, or Cowen, under which we may offer and sell our common stock having aggregate proceeds of up to $50.0 million from time to time. During the third quarter of2015, we sold 352,544 shares of our common stock under the ATM agreement at a weighted average price of $30.76 per share resulting in net proceeds of approximately$10.0 million , after underwriting discounts, commissions and other offering expenses. On June 19, 2014, we completed a follow-on public offering, pursuant to which weissued 4,600,000 shares of common stock at $30.50 per share, including the exercise of the underwriters’ option to purchase 600,000 additional shares of common stock,and received net proceeds of $131.3 million , after underwriting discounts, commissions and other offering expenses. On February 6, 2014, we completed our initial publicoffering, or IPO, for sale of 6,900,000 shares of common stock at $16.00 per share, including63Table of Contentsthe exercise of the underwriters’ option to purchase an additional 900,000 shares of common stock, for net proceeds of $98.6 million , after underwriting discounts,commissions and other offering expenses. We also raised $23.7 million through the issuance of convertible notes in the fourth quarter of 2013 and in January 2014.We have never been profitable and, as of December 31, 2015 , had an accumulated deficit of $ 332.3 million . We incurred net losses of $73.5 million , $62.9 millionand $ 52.4 million in the years ended December 31, 2015 , 2014 , and 2013 , respectively. As of December 31, 2015 , we had cash, cash equivalents, and investments of$254.1 million . We expect to continue to incur net operating losses for at least the next several years as we advance RT001 topical and RT002 injectable through clinicaldevelopment, seek regulatory approval, prepare for and, if approved, proceed to commercialization. Using a combination of third-party manufacturers and our ownmanufacturing facility, we have the ability to manufacture botulinum toxin type A drug product to support our clinical trials and eventually, our commercial production.Additionally, we currently utilize third-party clinical research organizations, or CROs, to carry out our clinical development and we do not yet have a sales organization. Wewill need substantial additional funding to support our operating activities, especially as we approach anticipated regulatory approval in the United States and otherterritories and begin to establish our sales capabilities. Adequate funding may not be available to us on acceptable terms, or at all. Our failure to obtain sufficient funds onacceptable terms when needed could have a material adverse effect on our business, results of operations, and financial condition.Results of OperationsRevenueDuring the years ended December 31, 2015 , 2014 and 2013 , we recognized revenue from license and royalty agreements. We did not have any product revenueduring the years ended December 31, 2015 , 2014 , and 2013 .We recognized royalty revenue during the years ended December 31, 2015 , 2014 , and 2013 related to the Relastin® asset purchase and royalty agreement. In August2011, we entered into the Relastin royalty agreement to sell the business related to our Relastin product line, to Precision Dermatology, Inc., or PDI. The Relastin royaltyagreement provides for a minimum royalty payment of $0.3 million per year, to be paid quarterly for up to 15 years from the execution date; however, the royalty agreementcould be terminated with 90 days' notice with the rights to the Relastin product line reverting back to us. The royalty agreement also provided for one-time payments uponachievement of certain milestones and in the year ended December 31, 2013, we received a one-time milestone payment of $150,000. PDI was subsequently acquired byValeant Pharmaceuticals International, Inc., or Valeant, in July 2014. On April 23, 2015, we received notice from Valeant terminating the royalty agreement effective as ofJuly 23, 2015; however, as of December 31, 2015, reversion of the Relastin intellectual property rights had not been completed and we are entitled to the minimum royaltypayment until such rights are reverted back to us. We do not currently have any plans for the future of Relastin, as our focus has been primarily on the development ofRT001 topical and RT002 injectable.Our license revenue has historically been derived through nonrefundable technology license fees for our RT001 topical and RT002 injectable product candidates. Inthe years ended December 31, 2014, and 2013, we recognized license revenue of $0.1 million, and $0.2 million, respectively, pursuant to an exclusive technologyevaluation agreement, whereby we received an upfront payment in the amount of $0.3 million, which was initially recorded as deferred revenue and recognized over theestimated performance period. During the year ended December 31, 2015 , there was no license revenue recognized.Costs and Operating ExpensesOur costs and operating expenses consist of research and development expenses and general and administrative expenses. The largest component of our operatingexpenses is our personnel costs, which consist primarily of wages, benefits and bonuses as well as related stock-based compensation. We expect our cash expenditures toincrease in the near term as we initiate and complete clinical trials and other associated programs relating to RT001 topical for the treatment of crow's feet, initiate andcomplete clinical trials using RT001 topical for the treatment of hyperhidrosis, and as we initiate and complete additional clinical trials and associated programs related toRT002 injectable for the treatment of glabellar lines and indications in muscle movement and other disorders, such as cervical dystonia.Research and Development ExpensesWe recognize research and development expenses as they are incurred. Since our inception, we have focused on our clinical development programs and the relatedresearch and development. We have been developing RT001 topical and RT002 injectable since 2002 and we typically use our employees, consultants and infrastructureresources across both programs. Our research and development expenses consist primarily of: 64Table of Contents•salaries and related expenses for personnel in research and development functions, including stock-based compensation;•expenses related to the initiation and completion of clinical trials for RT001 topical and RT002 injectable, including expenses related to production of clinicalsupplies;•fees paid to clinical consultants, clinical trial sites and vendors, including CROs in conjunction with implementing and monitoring our preclinical and clinicaltrials and acquiring and evaluating preclinical and clinical trial data, including all related fees, such as for investigator grants, patient screening fees, laboratorywork and statistical compilation and analysis;•the fair value of technology rights reacquired as part of our settlement with Medicis, as discussed below;•other consulting fees paid to third parties;•expenses related to establishment of our own manufacturing facilities;•expenses related to license fees and milestone payments under in-licensing agreements;•expenses related to compliance with drug development regulatory requirements in the United States, the European Union and other foreign jurisdictions; and•depreciation and other allocated expenses.For the years ended December 31, 2015 , 2014 , and 2013 , costs associated with our manufacturing, quality and regulatory efforts for both RT001 topical and RT002injectable development have been our largest research and development related expenses, totaling $33.9 million, or 71.3%, $28.0 million, or 83.7%, and $20.3 million, or73.0% of research and development expenses in 2015 , 2014 , and 2013 , respectively. These costs do not include clinical costs associated with the development of RT001topical and RT002 injectable. We believe that the strict allocation of costs by product candidate would not be meaningful. As such, we generally do not track these costs byproduct candidate.Clinical costs associated with the development of RT001 topical and RT002 injectable, including clinical trials of RT001 topical for the treatment of crow’s feet andclinical trials of RT002 injectable for the improvement of glabellar lines, totaled $13.6 million, or 28.7%, $5.4 million, or 16.3%, $7.5 million, or 27.0% of research anddevelopment expenses in 2015 , 2014 , and 2013 , respectively.Our research and development expenditures are subject to numerous uncertainties primarily related to the timing and cost needed to complete our respective projects.Further, the development timelines, probability of success and development expenses can differ materially from expectations and the completion of clinical trials may takeseveral years or more depending on the type, complexity, novelty and intended use of a product candidate. Accordingly, the cost of clinical trials may vary significantlyover the life of a project as a result of differences arising during clinical development. We expect our research and development expenses to increase as we continue ourclinical development of RT001 topical for the treatment of crow’s feet lines and our clinical development of RT002 injectable for the treatment of glabellar lines, or if theFDA requires us to conduct additional clinical trials for approval and as we enter into clinical trials for RT001 topical for hyperhidrosis and therapeutic indications forRT002 injectable.General and Administrative ExpensesGeneral and administrative expenses consist primarily of personnel costs, including stock-based compensation, for employees in our marketing, administration,finance, business development, and investor relations functions. Other significant expenses include professional fees for accounting and legal services, including legalservices associated with obtaining and maintaining patents. We expect that our general and administrative expenses will increase with the continued development of, and ifapproved, the commercialization of RT001 topical and RT002 injectable.Other Income (Expense)Interest IncomeInterest income consists primarily of interest income earned on our cash, cash equivalents, money market fund, and investment balances. We expect interest income tovary each reporting period depending on our average cash, cash equivalents, money market fund, and investments balances during the period and market interest rates. Todate, our interest income has not been significant in any individual period.Interest Expense65Table of ContentsInterest expense primarily consists of the interest charges associated with our convertible notes, notes payable, financing obligations, capital lease obligations, andcapitalized interest. Notes payable under our term loan agreement with Hercules, which matured and was fully paid off in March 2015, bore interest at a rate which is thegreater of (i) 9.85% per annum or (ii) 9.85% per annum plus the difference of the prime rate less 3.25%. The interest charge on our convertible notes and capital leaseobligations is fixed at the inception of the related transaction based on the incremental borrowing rate in effect on such date. Our interest expense, includes cash and non-cash components with the non-cash components consisting of (i) interest recognized from the amortization of debt issuance costs, which were capitalized on theConsolidated Balance Sheets, that are generally derived from cash payments related to the issuance of convertible notes and notes payable, (ii) interest recognized from theamortization of debt discounts, which were capitalized on the Consolidated Balance Sheets, derived from the issuance of warrants and derivatives issued in conjunction withconvertible notes and notes payable, (iii) interest recognized on the 2011 convertible notes, or 2011 Notes, which was not paid but instead converted into shares ofconvertible preferred stock, (iv) interest recognized on the 2013 convertible notes, or 2013 Notes, which was not paid but instead converted into shares of common stock,(v) interest capitalized for assets constructed for use in operations, (vi) interest related to the extinguishment of debt, which is classified as a gain or loss on debtextinguishments, and (vii) effective interest recognized on the financing obligation. The capitalized amounts related to the debt issuance costs and debt discounts aregenerally amortized to interest expense over the term of the related debt instruments.Upon the conversion of the 2013 Notes into shares of common stock during the year ended December 31, 2014, we recognized non-cash interest expense of $9.6million related to the 2013 Notes, including amortization of warrant-related debt discount of approximately $0.4 million up to the date of conversion, amortization of thederivative-related debt discount of $0.6 million up to the date of conversion, accrued interest of $0.3 million up to the date of conversion and a loss on extinguishment of$8.3 million upon conversion of the 2013 Notes into common stock.Change in Fair Value of Derivative Liabilities Associated with Convertible NotesOur derivative liabilities associated with 2013 Notes classified as liabilities on our Consolidated Balance Sheets and were remeasured to fair value at each balancesheet date with the corresponding gain or loss from the adjustment recorded in the Consolidated Statements of Operations and Comprehensive Loss. We recorded thederivative liabilities as a debt discount that was being amortized using the effective interest method over the term of the 2013 Notes. The amortization of this debt discountwas accelerated upon the completion of our IPO with the corresponding expense recorded in our Consolidated Statement of Operations and Comprehensive Loss. See Note9 to our Consolidated Financial Statements included elsewhere in this Form 10-K.Change in Fair Value of Derivative Liabilities Associated with the Medicis SettlementIn October 2012, we entered into a settlement and termination agreement with Medicis. The terms of the settlement provided for the reacquisition of the rights relatedto all territories of RT001 topical and RT002 injectable from Medicis and for consideration payable by us to Medicis of up to $25.0 million, comprised of (i) an upfrontpayment of $7.0 million, which was paid in 2012, (ii) a proceeds sharing arrangement payment of $14.0 million of which $6.9 million was paid in 2013 and the remaining$7.1 million was paid in 2014, and (iii) $4.0 million to be paid upon the achievement of regulatory approval of RT001 topical or RT002 injectable by us.We determined that the settlement provisions related to (ii) and (iii) above were derivative instruments that required fair value accounting at the time of settlement andfair value remeasurements on a periodic basis going forward. Accordingly, we recorded derivative liabilities on the balance sheet based on their respective fair values on thesettlement date.Our outstanding derivative liabilities associated with the Medicis settlement are classified as liabilities on our Consolidated Balance Sheet. These liabilities will bereduced as the related payment of $4.0 million is made under the settlement agreement and the remaining liabilities will be subsequently remeasured to fair value at eachbalance sheet date with the corresponding gain or loss from the adjustment recorded in the Consolidated Statement of Operations and Comprehensive Loss. Upon thecompletion of our IPO in February 2014, we paid $7.1 million in settlement of our remaining obligation under the Proceeds Sharing Arrangement of the October 2012Medicis settlement. We will continue to record adjustments to the fair value of the Medicis settlement derivative liability until the Product Approval Payment has been paid.Change in Fair Value of Common Stock Warrant Liability66Table of ContentsCommon stock warrants issued in connection with the 2013 Notes were classified as liabilities on our Consolidated Balance Sheet and require remeasurement at eachbalance sheet date. Upon the completion of our IPO, these common stock warrant liabilities were remeasured to fair value and settled in conjunction with the cashless netexercise of these warrants. See Note 14 to our Consolidated Financial Statements included elsewhere in this Form 10-K.Change in Fair Value of Convertible Preferred Stock Warrant LiabilityOur previously outstanding convertible preferred stock warrants were classified as liabilities on our Consolidated Balance Sheets at fair value as they werecontingently redeemable because they may obligate us to transfer assets to theholders at a future date under certain circumstances, such as a deemed liquidation event. The convertible preferred stock warrants were remeasured to fair value at eachbalance sheet date with the corresponding gain or loss from the adjustment recorded in the Consolidated Statement of Operations and Comprehensive Loss. Upon the IPO inFebruary 2014, these preferred stock warrants were remeasured to fair value and converted into common stock warrants with the corresponding liability reclassified toadditional paid in capital.In February 2014, two holders of preferred stock warrants exercised their put options to sell 22,856 warrants at an exercise price equal to the average fair value of ourstock price for 5 days preceding the exercise. We recorded a loss on cash settlement of $1.4 million as a result of this exercise, which was offset by a gain on fair valueremeasurement of $0.1 million through the date of settlement.In connection with our IPO, the remaining warrants to purchase 173,975 shares of convertible preferred stock were converted into warrants to purchase 173,975 sharesof common stock.Other Expense, netOther income (expense), net is comprised of miscellaneous tax and other expense items.Income TaxesSince inception, we have incurred net losses and have not recorded any U.S. federal or state income tax and the tax benefits of our operating losses have been fullyoffset by valuation allowances.67Table of ContentsResults of OperationsThe following tables provide our Consolidated Statements of Operations data for the years ended December 31, 2015 , 2014 , and 2013 which was derived from ouraudited Consolidated Financial Statements as included elsewhere in this Form 10-K. Year Ended December 31, 2015 2014 2013 (In thousands)Consolidated Statements of Operations Data: Revenue$300 $383 $617 Operating expenses: Research and development (1)47,529 33,390 27,831General and administrative (1)25,088 19,043 11,011Total operating expenses72,617 52,433 38,842Loss from operations(72,317) (52,050) (38,225)Interest income231 44 2Interest expense(1,190) (10,672) (15,164)Change in fair value of derivative liabilities associated with convertible notes— 4,032 2,660Change in fair value of derivative liabilities associated with the Medicis settlement127 (320) 47Change in fair value of common stock warrant liability— (2,151) (621)Change in fair value of convertible preferred stock warrant liability— (210) (743)Loss on settlement of preferred stock warrant— (1,356) —Other income (expense), net(327) (234) (404)Loss before income taxes(73,476) (62,917) (52,448)Benefit from income taxes— — —Net loss$(73,476) $(62,917) $(52,448)Unrealized loss on available for sale securities(40) — —Comprehensive loss(73,516) (62,917) (52,448) (1)Results above include stock-based compensation as follows: Year EndedDecember 31, 2015 2014 2013 (In thousands)Stock-Based Compensation: Research and development$6,511 $2,357 $194General and administrative5,877 4,173 354Total stock-based compensation$12,388 $6,530 $54868Table of ContentsResults of Operations for the Years Ended December 31, 2015 , 2014 , and 2013The following table presents our revenue for the periods indicated and related changes from the prior period:Revenue Years Ended December 31, 2015 vs. 2014 2014 vs. 2013 2015 2014 2013 % % (In thousands, except percentages)Relastin Product$— $— $150 N/A (100)%Relastin Royalty300 300 300 — % — %License— 83 167 (100)% (50)%Total revenue$300 $383 $617 (22)% (38)%Our total revenue for the year ended December 31, 2015 decreased by 22% , compared to the same period in 2014 , due to a decrease in license revenue in connectionwith an exclusive technology evaluation agreement with Procter & Gamble. Our total revenue for the year ended December 31, 2014 decreased by 38% , compared to thesame period in 2013 , due to a decrease in license revenue in connection with an exclusive technology evaluation agreement with Procter & Gamble and the Relastinproduct milestone revenue.In August 2011, we entered into an agreement to sell the business related to our Relastin product line, to Precision Dermatology, Inc., or PDI. In accordance with theagreement, we expect to receive royalties equal to at least $0.3 million per year per the minimum royalty requirements included within the agreement or an amount equal tothe actual royalty based sales of Relastin if greater than the minimum royalty requirements for a period up to fifteen years from the date of the agreement; however, theroyalty agreement could be terminated with 90 days' notice with the rights to the Relastin line reverting back to us. PDI was subsequently acquired by ValeantPharmaceuticals International, Inc., or Valeant, in July 2014. On April 23, 2015, we received notice from Valeant terminating the royalty agreement effective as of July 23,2015; however, as of December 31, 2015, reversion of the Relastin intellectual property rights had not been completed and we are entitled to the minimum royalty paymentuntil such rights are reverted back to us. We recognized the annual minimum royalty payment on a pro rata basis in the amount of $0.3 million for each of the years endedDecember 31, 2015 , 2014 and 2013 as set forth in the Relastin asset purchase agreement. Under the Relastin asset purchase agreement, we also recognized $150,000 inrevenue in the year ended December 31, 2013 for achievement of a one-time milestone.Operating Expenses Year Ended December 31, 2015 vs. 2014 2014 vs. 2013 2015 2014 2013 % % (In thousands, except percentages)Research and development$47,529 $33,390 $27,831 42% 20%General and administrative25,088 19,043 11,011 32% 73%Total operating expenses$72,617 $52,433 $38,842 38% 35%Research and Development ExpensesResearch and development expenses for the year ended December 31, 2015 increased by 42% , compared to the same period in 2014 , primarily due to increased costsrelated to personnel, stock-based compensation, pre-clinical and toxicology studies, and clinical trial expenditures, which increased primarily due to our ongoing RT002injectable Phase 2 study for the treatment of glabellar lines and initiation of our RT001 topical Phase 2 study for the treatment of hyperhidrosis, our RT002 injectable Phase2 study for the treatment of cervical dystonia, and our RT001 topical Phase 3 program for the treatment of moderate to severe lateral canthal lines.Research and development expenses for the year ended December 31, 2014 increased by 20% , compared to the same period in 2013 , primarily due to increased costsrelated to personnel, stock-based compensation, rent, quality control testing, the manufacturing facility, and leasing equipment to support product development activities.69Table of ContentsOur research and development expenses fluctuate as projects transition from one development phase to the next. Depending on the stage of completion and level ofeffort related to each development phase undertaken, we may reflect variations in our research and development expense. We expense both internal and external researchand development expenses as they are incurred. We typically share employees, consultants and infrastructure resources between the RT001 topical and RT002 injectableprograms.Stock-based compensation for research and development was $6.5 million , $2.4 million , and $0.2 million for the years ended December 31, 2015 , 2014 , and 2013 ,respectively.General and Administrative ExpensesGeneral and administrative expenses for the year ended December 31, 2015 increased by 32% , compared to the same period in 2014 , primarily due to increased costsrelated to personnel, legal matters, and stock-based compensation offset by a decrease in professional fees. Following our IPO, in February 2014, we incurred increasedcosts related to personnel and administrative activities to support the operation of a public company.General and administrative expenses for the year ended December 31, 2014 increased by 73% , compared to the same period in 2013 , primarily due to increased costsrelated to personnel and administrative costs related to the operation of a public company. Following the IPO, we incurred higher charges related to stock-basedcompensation, professional fees for accounting and tax services, marketing, legal costs and insurance premiums.Stock-based compensation for general and administration was $5.9 million , $4.2 million , and $0.4 million for the years ended December 31, 2015 , 2014 , and 2013 ,respectively.Other Expense Years Ended December 31, 2015 vs. 2014 2014 vs. 2013 2015 2014 2013 % % (In thousands, except percentages)Interest income$231 $44 $2 425% 2,100%Interest expense(1,190) (10,672) (15,164) (89)% (30)%Change in fair value of derivative liabilities associated with convertiblenotes— 4,032 2,660 (100)% 52%Change in fair value of derivative liabilities associated with the Medicissettlement127 (320) 47 (140)% (781)%Change in fair value of common stock warrant liability— (2,151) (621) (100)% 246%Change in fair value of convertible preferred stock warrant liability— (210) (743) (100)% (72)%Loss on settlement of preferred stock warrant— (1,356) — (100)% N/AOther expense, net(327) (234) (404) 40% (42)%Total other expense$(1,159) $(10,867) $(14,223) (89)% (24)% Our total other expense for the year ended December 31, 2015 decreased by 89% , compared to the same period in 2014 , primarily due to decrease in interestexpense, which is described below, a decrease in the fair value of the Medicis derivative liabilities, no loss on settlement of preferred stock warrants in the current period,and other one-time charges related to our IPO, including conversion of common stock warrants and our convertible notes into common stock upon the IPO and conversionof preferred stock warrants into equity-based common stock warrants.Our total other expense for the year ended December 31, 2014 decreased by 24% , compared to the same period in 2013 , primarily due to a decrease in interestexpense, which is described below, a decrease in the fair value of the Medicis derivative liabilities, and conversion of preferred stock warrants into equity based commonstock warrants, which are no longer required to be remeasured to fair value at each balance sheet date offset by an increase due to the loss on settlement of preferred stockwarrants and an increase in the fair value of the derivative liabilities associated with convertible notes.70Table of ContentsThe interest expense by cash and non-cash components is as follows: Years Ended December 31, 2015 vs. 2014 2014 vs. 2013 2015 2014 2013 % % (In thousands, except percentages)Interest expense Cash related interest expense (1)$(802) $(1,182) $(1,590) (32)% (26)% Non-cash interest expense Non-cash interest expense — debt issuance costs(39) (203) (490) (81)% (59)%Non-cash interest expense — warrant and derivative related debtdiscounts(5) (650) (4,128) (99)% (84)%Non-cash interest expense — convertible notes— (1,250) (9,409) (100)% (87)%Loss on extinguishment of 2013 Notes— (8,331) — (100)% N/ANon-cash interest expense - financing obligation(344) (28) — 1,129% N/ACapitalized interest expense (2)— 972 453 (100)% 115%Total non-cash interest expense$(388) $(9,490) $(13,574) (96)% (30)% Total interest expense$(1,190) $(10,672) $(15,164) (89)% (30)% (1)Cash related interest expense included interest payments to Hercules and the Essex Capital Facility.(2)Interest expense capitalized pursuant to Accounting Standards Codification Topic 835, Interest .Interest expense for the year ended December 31, 2015 decreased by 89% , compared to the same period in 2014 , primarily due to the loss on extinguishment of the2013 Notes, conversion of the 2013 Notes into common stock, and less cash paid for interest expense on the Hercules Notes Payable offset by a decrease in capitalization ofinterest expense for construction-in-progress. In February 2014, our IPO triggered an acceleration of interest on the 2013 Notes through the end of the notes, whichcombined with the outstanding principal balance, then converted into 1,637,846 shares of common stock. Interest expense for the year ended December 31, 2014 decreased by 30% , compared to the same period in 2013 , primarily due to capitalization of interest expensefor construction-in-progress, lower weighted average of debt outstanding, and a gain on the fair value remeasurement for warrants related to the common stock warrantconversion offset by an increase in interest expense related to effective interest from our financing obligation.Income TaxesThere was no provision or benefit from income taxes during the years ended December 31, 2015 , 2014 and 2013 .Liquidity and Capital ResourcesAs of December 31, 2015 , cash, cash equivalents, and investments totaled $254.1 million , an increase of $83.0 million , from December 31, 2014 . In April 2015, wereceived $9.8 million from the sale of equipment to Essex Capital and concurrently entered into a three year lease agreement for such equipment. In March 2015, we enteredinto the ATM agreement with Cowen under which we may offer and sell our common stock having aggregate proceeds of up to $50.0 million from time to time. During thethird quarter of 2015, we sold 352,544 shares of our common stock under the ATM agreement at a weighted average price of $30.76 per share resulting in net proceeds ofapproximately $10.0 million , after underwriting discounts, commissions and other offering expenses. As of December 31, 2015 , common stock for aggregate grossproceeds of $39.2 million remained available under this facility, subject to certain conditions as specified in the ATM agreement. In November 2015, the Company71Table of Contentscompleted a follow-on public offering or 2015 follow-on offering, pursuant to which the Company issued 3,737,500 shares of common stock at $36.00 per share, includingthe exercise of the underwriters’ option to purchase 487,500 additional shares of common stock, for net proceeds of $126.2 million , after underwriting discounts,commissions and other offering expenses.Since our inception, we have incurred losses from operations and negative cash flows from our operations. For the year ended December 31, 2015 , we had a net lossof $ 73.5 million . For the year ended December 31, 2015 , we used $55.7 million of cash to fund operating activities. As of December 31, 2015 , we had a working capitalsurplus of $241.9 million and an accumulated deficit of $332.3 million . We believe that our existing cash, cash equivalents, and investments, including net proceeds fromour IPO of $98.6 million , net proceeds from our June 2014 follow-on public offering of $131.3 million , net proceeds from our ATM offering of $10.0 million , netproceeds from our November 2015 follow-on public offering of $126.2 million , and proceeds of $10.9 million from sale of equipment to Essex Capital will allow us tofund our operations for at least the next 12 months.In December 2013, we entered into the Essex Capital Facility to finance the construction and installation of our RT001 topical fill to finish commercial line for use inour manufacturing facility. Under this facility, Essex Capital provided us a series of short-term notes aggregating to $10.8 million during the construction period that wasexpected to last through 2014. In December 2013 and January 2014, we drew down $2.5 million under short-term notes pursuant to the Essex Capital Facility for anaggregate amount totaling $5.0 million. On May 28, 2014, upon completion of the installation and acceptance of a portion of the RT001 topical fill to finish commercialline, we sold the equipment back to Essex Capital for a purchase price equal to the principal and any accrued interest then outstanding on the notes issued to finance suchequipment. We then leased back the equipment for a thirty-six month lease term. At the end of the lease term, we intend to purchase the equipment at 10% of the originalequipment cost.In December 2014, we entered into the First Amendment to the Loan and Lease Agreement with Essex Capital. Under the terms of this Amendment, we repaid theoutstanding debt balance of $3.9 million . In February 2015, we executed the Second Amendment to the Loan and Lease Agreement to extend the term of the facility to nolater than April 15, 2015 and increase the purchase price of the remainder of the equipment by $0.1 million to approximately $9.8 million. Concurrently with this sale, wewill lease the equipment from Essex Capital for a fixed monthly payment to be paid monthly over three years. At the end of the lease, we intend to purchase the leasedequipment for 10% of the original purchase amount.We have no current source of revenue to sustain our present activities, and we do not expect to generate product revenue until, and unless, the FDA or otherregulatory authorities approve RT001 topical or RT002 injectable and we begin commercializing them. Accordingly, our ability to continue as a going concern will requireus to obtain additional financing to fund our operations. The sale of additional equity securities could result in additional dilution to our stockholders and those securitiesmay have rights senior to those of our common stock. The incurrence of indebtedness would result in increased debt service obligations and could result in operating andfinancing covenants that would restrict our operations. We cannot assure you that financing will be available in the amounts we need or on terms acceptable to us, if at all.Cash FlowsWe derived the following summary of our Consolidated Cash Flows for the periods indicated from our audited Consolidated Financial Statements included elsewherein this Form 10-K (in thousands): Year Ended December 31, 2015 2014 2013Net cash used in operating activities$(55,669) $(55,073) $(47,758)Net cash used in investing activities(56,340) (6,900) (6,402)Net cash provided by financing activities142,592 229,091 53,991Cash Flows from Operating ActivitiesCur cash used in operating activities is primarily driven by personnel-related expenditures, manufacturing costs, clinical development costs, and costs related to ourfacilities. Our cash flows from operating activities will continue to be affected principally by our working capital requirements and the extent to which we increase spendingon personnel and research and development activities as our business grows.Cash used in operating activities of $55.7 million during the year ended December 31, 2015 resulted primarily from our net loss of $73.5 million, offset by stock-based compensation expense of $12.4 million, depreciation expense of $2.0 million,72Table of Contentsand other adjustments of $0.9 million. The increase of $2.5 million in our net operating assets and liabilities was primarily due to an increase in accruals other currentliabilities, deferred rent, and other non-current assets by $3.4 million offset by decreases in prepaid expenses and other current assets and accounts payable by $0.9 million.Cash used in operating activities of $55.1 million during the year ended December 31, 2014 resulted in part from our net loss of $62.9 million, non-cash adjustmentsfor the revaluation of derivative liabilities associated with our convertible notes of $4.0 million, and capitalized interest of $1.0 million offset by loss on extinguishment ofour 2013 Notes of $8.3 million, revaluation of common stock warrant liability of $2.2 million, loss on extinguishment of warrant liability upon exercise of put option bywarrant holder of $1.4 million, amortization of debt discounts of $1.3 million, revaluation of convertible preferred stock warrant liability of $0.2 million, stock-basedcompensation expense of $6.5 million, depreciation expense of $2.1 million, issuance of common stock warrants of $0.4 million, revaluation of derivative liabilityassociated with Medicis settlement of $0.3 million, and interest upon issuance of the 2013 Notes and Essex Notes of $0.3 million. The $10.2 million decrease in our netoperating assets and liabilities was primarily due to payments made under the Medicis settlement totaling $7.1 million and decreases in prepaid and other current assets,other non-current assets, accounts payable, and deferred revenue by $6.1 million offset by an increase in accruals and other current liabilities and deferred rent by $3.0million.Cash used in operating activities of $47.8 million during the year ended December 31, 2013 resulted in part from our net loss of $52.4 million and derivativeliabilities recognized as a result of non-cash adjustments for the revaluation of derivative liabilities associated with our convertible notes of $2.7 million offset by theaccrual of interest on our convertible notes of $9.2 million, convertible preferred stock warrant modification remeasurement adjustment of $1.2 million, amortization ofdiscount on debt and capital leases of $4.1 million, and depreciation and amortization of our property and equipment of $1.9 million. The $9.8 million increase in our netoperating assets and liabilities was primarily a result of the reduction in the derivative liabilities associated with the Medicis settlement due to the payment of $6.9 millionduring the period, the decrease of other non-current assets of $2.6 million and the decrease of accruals and other current liabilities of $3.9 million, however, these increaseswere partially offset by increases in accounts payable of $3.2 million related to the growth in our operations during the year. Property and equipment purchases included inaccounts payable and accruals and other current liabilities was $2.3 million and deferred IPO costs included in accounts payable and accruals and other current liabilitieswere $2.5 million as of December 31, 2013.Cash Flows from Investing ActivitiesCash used in investing activities was $56.3 million for the year ended December 31, 2015 consisting of $54.1 million for purchases of investments and $3.3 million inpurchase of property and equipment which were offset by sales maturity of short-term investments and a reduction of our restricted cash of $1.1 million. Cash used in investing activities was $6.9 million for the year ended December 31, 2014 consisting of $7.0 million in purchases of property and equipment whichwere partially offset by a reduction of our restricted cash of $0.1 million.Cash used in investing activities was $6.4 million for the year ended December 31, 2013 consisting of $6.5 million due to purchases of property and equipment whichwere partially offset by our restricted cash of $0.1 million.Cash Flows from Financing ActivitiesCash provided by financing activities was $142.6 million for the year ended December 31, 2015 comprised of proceeds of $126.2 million from our 2015 follow-onoffering, $10.0 million from issuance of common stock in connection with our ATM offering, net of deferred offering costs, proceeds from sale of equipment to EssexCapital of $9.8 million, and proceeds from the exercise of stock options and ESPP of $2.8 million offset by principal payments on our notes payable of $2.7 million,principal payments on our financing obligation and capital leases of $2.6 million, and net settlement of restricted stock awards to settle employee tax obligations of $0.9million.Cash provided by financing activities was $229.1 million for the year ended December 31, 2014 primarily comprised of proceeds of $234.6 million from issuance ofcommon stock, after deducting underwriting discounts and commissions, proceeds of $6.7 million from issuance of convertible notes and note payable, and proceeds fromexercise of stock options and ESPP of $1.8 million. These increases were partially offset by principal payments on our notes payable of $12.3 million, principal paymentson our financing obligation and capital leases of $0.2 million, and payments to settle warrants of $1.4 million.Cash provided by financing activities was $54.0 million for the year ended December 31, 2013 primarily comprised of net proceeds received from the issuance of ourSeries E-5 convertible preferred stock in the amount of $40.6 million and proceeds from issuance of convertible notes and notes payable of $21.9 million which werepartially offset by repayments of $7.6 million on our outstanding debt and capital lease obligations.73Table of ContentsOperating and Capital Expenditure RequirementsWe have not achieved profitability on a quarterly or annual basis since our inception and we expect to continue to incur net losses for the foreseeable future. Weexpect our cash expenditures to increase in the near term to initiate and complete clinical trials and other associated programs relating to the RT001 topical for the treatmentof crow's feet and hyperhidrosis and to initiate and complete additional clinical trials and associated programs related to RT002 injectable for the treatment of glabellar linesand indications in muscle movement disorders, such as cervical dystonia. We believe that our existing capital resources, the net proceeds from our IPO, and net proceedsfrom our follow-on public offerings will be sufficient to fund our operations for at least the next 12 months. However, we anticipate that we will need to raise substantialadditional financing in the future to fund our operations. In order to meet these additional cash requirements, we may seek to sell additional equity or convertible debtsecurities that may result in dilution to our stockholders. If we raise additional funds through the issuance of convertible debt securities, these securities could have rightssenior to those of our common stock and could contain covenants that restrict our operations. There can be no assurance that we will be able to obtain additional equity ordebt financing on terms acceptable to us, if at all. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that includecovenants limiting or restricting our ability to take specific actions such as incurring debt, making capital expenditures or declaring dividends. Our failure to obtainsufficient funds on acceptable terms when needed could have a material adverse effect on our business, results of operations, and financial condition.If adequate funds are not available to us on a timely basis, or at all, we may be required to terminate or delay clinical trials or other development activities for RT001topical, RT002 injectable and any future product candidates, or delay our establishment of sales and marketing capabilities or other activities that may be necessary tocommercialize our product candidates, if we obtain marketing approval. We may elect to raise additional funds even before we need them if the conditions for raisingcapital are favorable. Our future capital requirements depend on many factors, including: •the results of our clinical trials for RT001 topical and RT002 injectable;•the timing of, and the costs involved in, obtaining regulatory approvals for RT001 topical, RT002 injectable or any future product candidates;•the number and characteristics of any additional product candidates we develop or acquire;•the scope, progress, results and costs of researching and developing RT001 topical, RT002 injectable or any future product candidates, and conductingpreclinical and clinical trials;•the cost of commercialization activities if RT001 topical, RT002 injectable or any future product candidates are approved for sale, including marketing, salesand distribution costs;•the cost of manufacturing RT001 topical, RT002 injectable or any future product candidates and any products we successfully commercialize, and maintainingour related facilities;•our ability to establish and maintain strategic collaborations, licensing or other arrangements and the terms of and timing such arrangements;•the degree and rate of market acceptance of any future approved products;•the emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing products ortreatments;•any product liability or other lawsuits related to our products;•the expenses needed to attract and retain skilled personnel;•any litigation, including litigation costs and the outcome of such litigation;•the costs associated with being a public company;•the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of suchlitigation; and74Table of Contents•the timing, receipt and amount of sales of, or royalties on, future approved products, if any.Please see “Item 1A. Risk Factors” for additional risks associated with our substantial capital requirements.We have not generated revenue from RT001 topical or RT002 injectable and we do not know when, or if, we will generate such revenue. We do not expect togenerate significant revenue unless or until we obtain marketing approval of, and commercialize RT001 topical or RT002 injectable. We expect our continuing operatinglosses to result in increases in cash used in operations over the next several years.We have based our estimates of future capital requirements on a number of assumptions that may prove to be wrong, and changing circumstances beyond our controlmay cause us to consume capital more rapidly than we currently anticipate. For example, our ongoing clinical trials of RT001 topical and RT002 injectable may encountertechnical or other difficulties that could increase our development costs more than we currently expect or the FDA may require us to conduct additional clinical trials priorto approving RT001 topical or RT002 injectable. Because of the numerous risks and uncertainties associated with the development and commercialization of our productcandidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials beyond2016.Critical Accounting Policies and EstimatesOur Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of theseConsolidated Financial Statements requires our management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenue and expenses during the applicableperiods. We base our estimates, assumptions and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances.Different assumptions and judgments would change the estimates used in the preparation of our Consolidated Financial Statements, which, in turn, could change the resultsfrom those reported. We evaluate our estimates, assumptions and judgments on an ongoing basis.The critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our Consolidated Financial Statements aredescribed below.Clinical Trial AccrualsClinical trial costs are charged to research and development expense as incurred. We accrue for expenses resulting from obligations under contracts with clinicalresearch organizations, or CROs, investigators and consultants, and under certain other agreements in connection with conducting clinical trials. The financial terms of thesecontracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or servicesare provided. Our objective is to reflect the appropriate trial expense in the Consolidated Financial Statements by matching the appropriate expenses with the period inwhich services and efforts are expended. In the event advance payments are made to a CRO, the payments will be recorded as a prepaid asset which will be amortized asservices are rendered.The CRO contracts generally include pass-through fees including, but not limited to, regulatory expenses, investigator fees, travel costs and other miscellaneous costs,including shipping and printing fees. We determine accrual estimates through reports from and discussion with clinical personnel and outside services providers as to theprogress or state of completion of trials, or the services completed. We estimate accrued expenses as of each balance sheet date in the Consolidated Financial Statementsbased on the facts and circumstances known at that time. Our clinical trial accrual is dependent, in part, upon the receipt of timely and accurate reporting from the CROs andother third-party vendors. As of December 31, 2015 , there have not been any material adjustments to our estimated accrued expenses.Stock-Based CompensationWe recognize compensation costs related to stock options granted to employees and non-employee directors based on the estimated fair value of the awards on thedate of grant, net of estimated forfeitures, using the Black-Scholes option-pricing model. The grant date fair value of the stock-based awards is recognized over the requisiteservice period, which is generally the vesting period of the respective awards. Stock-based compensation expenses are classified in the Consolidated Statements ofOperations and Comprehensive Loss based on the functional area to which the related recipients belong.75Table of ContentsThe estimated grant date fair values of the option awards granted to employees and non-employee directors during the years ended December 31, 2015 , 2014 , and2013 were calculated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2015 2014 2013Expected term (in years)6.0 6.0 6.0Expected volatility62.2% 57.4% 59.1%Risk-free interest rate1.6% 1.9% 1.3%Dividend rate0.0% 0.0% 0.0%The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions that determine the fair value of options. These assumptionsare as follows: •Expected term — The expected term represents the period that our options are expected to be outstanding and is calculated using the simplified method. TheCompany qualifies for the simplified method as its stock options have the following characteristics: (i) granted at-the-money; (ii) exercisability is conditionedupon service through the vesting date; (iii) termination of service prior to vesting results in forfeiture; (iv) limited exercise period following termination ofservice; and (v) options are non-transferable and non-hedgeable, or “plain vanilla” options, and the Company has limited history of exercise data.•Expected volatility — Because our common stock has only been publicly traded for a short time, the expected volatility was derived from the average historicvolatilities of several unrelated public companies within our industry that we considered to be comparable to our business over a period equivalent to theexpected term of the option.•Risk-free interest rate — The risk-free interest rate is based on the U.S. Treasury constant maturity rates approximately equal to the option’s expected term.•Dividend rate — The expected dividend was assumed to be zero as we have never paid dividends and have no current plans to do so.In addition to the assumptions used in the Black-Scholes option-pricing model, we must also estimate a forfeiture rate to calculate the stock-based compensation forour options. Our forfeiture rate is based on an analysis of our actual forfeitures. We will continue to evaluate the appropriateness of the forfeiture rate based on actualforfeiture experience, analysis of employee turnover and other factors. Changes in the estimated forfeiture rate can have a significant impact on our stock-basedcompensation as the cumulative effect of adjusting the rate is recognized in the period in which we change the forfeiture estimate. If a revised forfeiture rate is higher thanthe previously estimated forfeiture rate, we make an adjustment that will result in a decrease to the stock-based compensation recognized in our Consolidated FinancialStatements. If a revised forfeiture rate is lower than the previously estimated forfeiture rate, we make an adjustment that will result in an increase to the stock-basedcompensation recognized in our Consolidated Financial Statements.We will continue to use judgment in evaluating the expected term, expected volatility and forfeiture rate related to our stock-based compensation calculations on aprospective basis. As we continue to accumulate additional data related to our common stock, we may make refinements to the estimates of our expected terms, expectedvolatility and forfeiture rates that could materially impact our future stock-based compensation.Warrant LiabilitiesWe issued freestanding warrants to purchase shares of common stock and convertible preferred stock in connection with certain debt and lease transactions. Prior tothe completion of our IPO, we accounted for warrants to purchase shares of our common stock and convertible preferred stock as liabilities at fair value because thesewarrants obligated us to transfer assets to the holders at a future date under certain circumstances, such as change of control. We remeasured these common stock andpreferred stock warrants to current fair value at each balance sheet date, and any change of fair value was recognized as a change in fair value of the warrant liability in ourConsolidated Statements of Operations and Comprehensive Loss. Common stock warrants classified as equity at inception are recorded to additional paid-in capital at fairvalue upon issuance.The warrants were recorded at fair value using the Black-Scholes option pricing model.76Table of ContentsThe fair value of the previously outstanding convertible preferred stock warrants was remeasured as of each period end using a Black-Scholes option-pricing modelwith the following assumptions: February 5, 2014 Upon conversionRemaining contractual term (in years)5.9Expected volatility55%Risk-free interest rate1.8%Expected dividend rate0%These assumptions are subjective and the fair value of these warrants may have differed significantly had we used different assumptions. In February 2014, thecommon stock warrants were net exercised in connection with our IPO and the warrants to purchase preferred stock converted into warrants to purchase common stock.Derivative Liabilities Associated with the Medicis Settlement In October 2012, we entered into a settlement and termination agreement with Medicis. The terms of the settlement provided for the reacquisition of the rights relatedto all territories of RT001 topical and RT002 injectable from Medicis and for consideration payable by us to Medicis of up to $25.0 million, comprised of (i) an upfrontpayment of $7.0 million, which was paid in 2012, (ii) a Proceeds Sharing Arrangement Payment of $14.0 million of which $6.9 million was paid in 2013 and the remaining$7.1 million was paid in 2014, and (iii) $4.0 million to be paid upon the achievement of regulatory approval of RT001 topical or RT002 injectable by us, or ProductApproval Payment.We determined that the settlement provisions related to (ii) and (iii) above were derivative instruments that required fair value accounting at the time of settlement andfair value remeasurements on a periodic basis going forward. Accordingly, we recorded derivative liabilities on the balance sheet based on their respective fair values on thesettlement date. These derivative liabilities will be reduced as the related payments are made under the settlement agreement. The remaining liabilities will be subsequentlyremeasured to fair value as of each balance sheet date with the related remeasurement adjustments recognized in the Consolidated Statements of Operations andComprehensive Loss.The fair value of the Product Approval Payment derivative was initially determined by estimating the timing and probability of the related approval and multiplyingthe payment amount by this probability percentage and a discount factor assuming a term of 2 years and a risk-free rate of 0.25% . As of December 31, 2014, we determinedthe fair value of the liability for the Product Approval Payment was $1.5 million , which was measured by assuming a term of 3.5 years, a risk-free rate of 1.2% and a creditrisk adjustment of 6.5% . As of December 31, 2015, the Company determined the fair value of the liability for the Product Approval Payment was $1.4 million , which wasmeasured by assuming a term of 3.5 years, a risk-free rate of 1.4% and a credit risk adjustment of 9.0% . Our assumption for the expected term as of December 31, 2015 isbased on an expected Biologics License Application, or BLA, approval in mid-2019. The primary drivers of any fair value movements for the Product Approval Paymentderivative are the estimated probability of the related approval and the credit risk adjustment. If the probability estimate increases (decreases) and the credit risk adjustmentdecreases (increases), the fair value of the derivative will increase (decrease).We will record adjustments to the fair value of the derivative liabilities associated with the Medicis settlement until the Product Approval Payment has been paid. Atthat time, the Product Approval Payment derivative will be adjusted to fair value one last time immediately prior to settlement.77Table of ContentsImpairment of Long-Lived AssetsWe assess the impairment of long-lived assets, such as property and equipment subject to depreciation and amortization, when events or changes in circumstancesindicate that their carrying amount may not be recoverable. Among the factors and circumstances we considered in determining recoverability are: (i) a significant adversechange in the extent to which, or manner in which, a long-lived asset is being used or in its physical condition; (ii) a significant adverse change in legal factors or in thebusiness climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; (iii) an accumulation of costs significantly inexcess of the amount originally expected for the acquisition; and (iv) current-period operating or cash flow loss combined with a history of operating or cash flow losses ora projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset. Recoverability of assets to be held and used is measured by acomparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an assetexceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.There have been no indicators of impairment, and we did not record any impairment losses during the years ended December 31, 2015 , 2014 and 2013 .Income TaxesWe are subject to income taxes in the United States, and we use estimates in determining our provision for income taxes. We use the asset and liability method ofaccounting for income taxes. Under this method, we calculate deferred tax asset or liability account balances at the balance sheet date using current tax laws and rates ineffect for the year in which the differences are expected to affect our taxable income.We estimate actual current tax exposure together with assessing temporary differences resulting from differences in accounting for reporting purposes and taxpurposes for certain items, such as accruals and allowances not currently deductible for tax purposes. These temporary differences result in deferred tax assets andliabilities, which are included in our Consolidated Balance Sheets. In general, deferred tax assets represent future tax benefits to be received when certain expensespreviously recognized in our Consolidated Statements of Operations and Comprehensive Loss become deductible expenses under applicable income tax laws or when netoperating loss or credit carryforwards are utilized. Accordingly, realization of our deferred tax assets is dependent on future taxable income against which these deductions,losses and credit carryforwards can be utilized.We must assess the likelihood that our deferred tax assets will be recovered from future taxable income, and to the extent we believe that recovery is not likely,establish a valuation allowance.As of December 31, 2015 , we had net operating loss carryforwards available to reduce future taxable income, if any, for federal, California, and New Jersey incometax purposes of $318.2 million , $162.3 million , and $243.8 million , respectively. If not utilized, the federal net operating loss carryforward begin expiring in 2020, theCalifornia net operating loss carryforwards began expiring in 2015, and the New Jersey state net operating loss carryforwards begin expiring in 2030. The Companyrecognizes excess tax benefits associated with the exercise of stock options directly to stockholders’ equity only when realized. The net operating loss related deferred taxassets do not include excess tax benefits from employee stock option exercises. As of December 31, 2015 , the net operating loss reported as a deferred tax asset does notinclude approximately $8.0 million attributable to excess stock option deductions. The Company follows with or without method to determine when such net operating losshas been realized.As of December 31, 2015 , we also had research and development credit carryforwards of $1.0 million and $5.1 million available to reduce future taxable income, ifany, for federal and California state income tax purposes, respectively. If not utilized, the federal credit carryforwards will begin expiring in 2023 and the California creditcarryforwards have no expiration date.In general, if we experience a greater than 50 percentage point aggregate change in ownership over a three-year period (a Section 382 ownership change), utilizationof our pre-change NOL carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code (California and New Jersey have similar laws).The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change (subject to certain adjustments) by theapplicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforwards before utilization. We determined that an ownershipchange occurred on April 7, 2004, but that all carryforwards can be utilized prior to the expiration. Our ability to use our remaining NOL carryforwards may be furtherlimited if we experienced a Section 382 ownership change in connection with future offerings or as a result of future changes in its stock ownership.78Table of ContentsJOBS ActWe are an "emerging growth company," as defined in the JOBS Act and, for as long as we continue to be an "emerging growth company," we may choose to takeadvantage of exemptions from various reporting requirements applicable to other public companies but not to "emerging growth companies," including not being requiredto comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation inour periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholderapproval of any golden parachute payments not previously approved. We will remain an "emerging growth company" until the earlier of (1) the last day of the fiscal year(a) following the fifth anniversary of the closing of our IPO, (b) in which we have total annual gross revenues of over $1.0 billion or (c) in which we are deemed to be alarge accelerated filer, which means the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on whichwe have issued more than $1.0 billion in non-convertible debt during the prior three-year period.Under the JOBS Act, emerging growth companies that become public can delay adopting new or revised accounting standards until such time as those standardsapply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will besubject to the same new or revised accounting standards as other public companies that are not emerging growth companies.Contractual ObligationsOur contractual commitments will have an impact on our future liquidity. The following table, which summarizes our contractual obligations as of December 31,2015 , represents material expected or contractually committed future obligations, with terms in excess of one year. We believe that we will be able to fund these obligationsthrough cash generated funding activities and from our existing cash balances. Payments Due by PeriodContractual Obligations:Total Year 1 Years 2 to 3 Years 4 to 5 More than5 Years (In thousands)Operating lease obligations (1)$48,548 $5,222 $10,972 $11,710 $20,644Other long-term liabilities reflected on our balance sheetunder GAAP (2)9,102 4,217 4,885 — —Total$57,650 $9,439 $15,857 $11,710 $20,644 (1)Operating lease agreements represent our obligations to make payments under non-cancelable lease agreements for our facilities.(2)Other long-term liabilities reflected on our balance sheet under GAAP represents our financing obligation to make lease payments under the Loan and LeaseAgreement with Essex Capital.This table does not include any milestone payments, which may become payable to third parties under license agreements, as the timing and likelihood of suchpayments are not known.This table does not include a liability for unrecognized tax benefits related to various federal and state income tax matters of $1.5 million at December 31, 2015 . Thetiming of the settlement of these amounts was not reasonably estimable at December 31, 2015 . We do not expect payment of amounts related to the unrecognized taxbenefits within the next twelve months.Off-Balance Sheet ArrangementsAs of December 31, 2015 , we did not have any off-balance sheet arrangements or any relationships with any entities or financial partnerships, such as entities oftenreferred to as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or othercontractually narrow or limited purposes.Recent Accounting PronouncementsRefer to "Recent Accounting Pronouncements" in Note 2 to our Consolidated Financial Statements included elsewhere in this Form 10-K.79Table of ContentsITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adversechanges in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates and interest rates. We do nothold or issue financial instruments for trading purposes.Interest Rate SensitivityOur exposure to market risk for changes in interest rates relates primarily to our cash, cash equivalents, and investments. We had cash, cash equivalents, andinvestments of $254.1 million and $171.0 million as of December 31, 2015 and 2014 , respectively. As of December 31, 2015 , our cash, cash equivalents, and investmentswere held in deposit, money market fund accounts, and U.S. government agency obligations. Our primary exposure to market risk is interest income sensitivity, which isaffected by changes in the general level of the interest rates in the United States. A hypothetical 10% movement in interest rates would not be expected to have a materialimpact on our Consolidated Financial Statements. We mitigate market risk for changes in interest rates by holding our investments in U.S. treasury and government agencyobligations to maturity.Foreign ExchangeOur operations are primarily conducted in the United States using the U.S. Dollar. However, we conduct limited operations in foreign countries, primarily for clinicaland regulatory services, whereby settlement of our obligations are denominated in the local currency. Transactional exposure arises when transactions occur in currenciesother than the U.S. Dollar. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction with the resultingliabilities being translated into the U.S. Dollar at exchange rates prevailing at the balance sheet date. The resulting gains and losses, which were insignificant for the yearsended December 31, 2015 , 2014 and 2013 , are included in other expense in the Consolidated Statements of Operations and Comprehensive Loss. We do not use currencyforward exchange contracts to offset the related effect on the underlying transactions denominated in a foreign currency.80Table of ContentsITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAThe financial statements required by this item are set forth beginning on page F-3 of this Annual Report on this Form 10-K and are incorporated herein by reference.81Table of ContentsITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.82Table of ContentsITEM 9A.CONTROLS AND PROCEDURES(a) Evaluation of Disclosure Controls and ProceduresWe are responsible for maintaining disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls andprocedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the ExchangeAct is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, withoutlimitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act isaccumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisionsregarding required disclosure.Based on our management’s evaluation (with the participation of our principal executive officer and our principal financial officer) of our disclosure controls andprocedures as required by Rule 13a-15 under the Exchange Act, our principal executive officer and our principal financial officer have concluded that our disclosurecontrols and procedures were effective to achieve their stated purpose as of December 31, 2015 , the end of the period covered by this report.(b) Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles, or GAAP. Our internal controlover financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financialstatements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted anevaluation of the effectiveness of our internal control over financial reporting as of December 31, 2015 based on the criteria established in Internal Control - IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on our evaluation under the criteria set forth in InternalControl - Integrated Framework issued by the COSO, our management concluded our internal control over financial reporting was effective as of December 31, 2015 .(c) Changes in Internal Control over Financial ReportingThere were no changes in our internal control over financial reporting during the year ended December 31, 2015 that have materially affected, or are reasonably likelyto materially affect, our internal control over financial reporting.83Table of ContentsITEM 9B.OTHER INFORMATIONNone.84Table of ContentsPART III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEBoard of DirectorsOur board of directors currently consists of ten members. In accordance with our amended and restated certificate of incorporation, our board of directors is dividedinto three classes with staggered three-year terms. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected toserve from the time of election and qualification until the third annual meeting following election. The term of Class I directors will expire at the annual meeting ofstockholders to be held in 2018; the term of Class II directors will expire at the annual meeting of stockholders to be held in 2016; and the term of Class III directors willexpire at the annual meeting of stockholders to be held in 2017.Our amended and restated certificate of incorporation and amended and restated bylaws provide that the authorized number of directors may be changed only byresolution approved by a majority of our board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed among thethree classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.The following is a brief biography of each member of our board of directors, as of March 4, 2016, with each biography including information regarding theexperiences, qualifications, attributes or skills that caused our board of directors to determine that each member of our board of directors should serve as a director as of thedate of this Form 10-K.Class I DirectorsAngus C. Russell , age 60, has served as a director and Chairman of the Board of our company since March 2014. Mr. Russell was Chief Executive Officer of Shireplc, or Shire, a biopharmaceutical company, from June 2008 until April 2013, and as a member of its board of directors from 1999 until 2013. From December 1999 toJune 2008, Mr. Russell served as Chief Financial Officer of Shire. Prior to joining Shire, Mr. Russell served at AstraZeneca plc, a pharmaceutical and biologics company,most recently as VP of Corporate Finance. Mr. Russell is a former Non-Executive Director of the City of London Investment Trust plc. Mr. Russell is a CharteredAccountant and is a Fellow of the Association of Corporate Treasurers. Mr. Russell has served on the Board of Directors at Mallinckrodt plc, a pharmaceuticals company,since August 2014, BioTime, Inc., a biotechnology company, since December 2014 and TherapeuticsMD, Inc., a pharmaceutical company, since March 2015. Our board ofdirectors believes that Mr. Russell’s financial expertise, experience at multiple public pharmaceutical companies and his expertise in the development andcommercialization of specialty pharmaceutical products make him qualified to serve on our board of directors.Phyllis Gardner, M.D. , age 65, has served as a director of our company since December 2006. Dr. Gardner has spent over 35 years in academia, medicine andindustry. She served at Essex Woodlands, a growth equity firm that focuses on the healthcare industry, from June 1999 to 2014, in various capacities including as an adjunctPartner. Dr. Gardner has served on the board of directors of several public and private companies. She began her academic medical career at Stanford University, where shehas held several positions including Senior Associate Dean for Education and Student Affairs and remains today as Professor of Medicine. From 1994 to 1996, she took aleave of absence from Stanford University to serve as Principal Scientist, Vice President of Research and Head of ALZA Technology Institute, a major drug deliverycompany. Dr. Gardner holds a B.S. from the University of Illinois and an M.D. from Harvard University. Our board of directors believes that Dr. Gardner’s medical,healthcare and private equity experience, operating experience and significant experience serving as a director of our company and other healthcare companies make herqualified to serve on our board of directors.James Glasheen, Ph.D. , age 48, has served as a director of our company since April 2004. Since 2002, Dr. Glasheen has served as a general partner with TechnologyPartners, a venture capital firm that focuses on clean tech and life science companies. Prior to his work at Technology Partners, he served as Managing Director of CITVenture Capital. From 1996 to 2000, he was a leader within McKinsey & Company’s Pharmaceutical and Medical Products Practice. Dr. Glasheen also serves as an advisorto the National Science Foundation’s (NSF) SBIR program in Washington D.C. Dr. Glasheen currently serves as a member of the board of directors of several privately-held biotechnology, consumer medical and medical device companies. Dr. Glasheen holds a B.S. from Duke University and an M.A. and Ph.D. from Harvard University.Our board of directors believes that Dr. Glasheen’s experiences with facilitating the growth of venture-backed companies, his experiences with McKinsey & Company andhis consumer medical company expertise, together with his historical perspective on our company, make him qualified to serve on our board of directors.85Table of ContentsClass II DirectorsRonald W. Eastman , age 63, has served as a director of our company since December 2009. He has been a managing director at Essex Woodlands, a growth equityfirm that focuses on the healthcare industry since October 2006. From 2002 to 2006, Mr. Eastman was the Chief Executive Officer of Rinat Neuroscience Corporation, abiotech company spun out of Genentech, Inc. Mr. Eastman currently serves on the boards of directors of Corium International, Inc., a biotechnology company, as well as onseveral privately held life sciences companies. Mr. Eastman holds a B.A. from Williams College and an M.B.A. from Columbia University. In addition, through his serviceas a director on numerous corporate boards, Mr. Eastman has extensive and valuable corporate governance, board oversight and transactional experience. Our board ofdirectors believes that such experience allows Mr. Eastman to make valuable contributions to our board of directors.Mark A. Prygocki, Sr. , age 49, has served as a director and Chairman of the Audit Committee of our company since May 2014. Mr. Prygocki worked at MedicisPharmaceutical Corporation, or Medicis, a biopharmaceutical company, for more than 20 years and served as President from July 2010 to December 2012. Prior to that, Mr.Prygocki held several senior-level positions at Medicis, including Chief Operating Officer, Executive Vice President, and Chief Financial Officer and Treasurer. Mr.Prygocki’s previous experience includes work at Citigroup, an investment banking firm, in the regulatory reporting division. Prior to that, Mr. Prygocki spent several yearsin the audit department of Ernst & Young, LLP. Mr. Prygocki currently serves on the Board of Directors of Clarus Therapeutics, Inc. as well as Chairman of its auditcommittee. He is certified by the Arizona State Board of Accountancy and the New York Society of CPAs. Mr. Prygocki serves on the board of Whispering Hope RanchFoundation, a non-profit organization that assists children with special needs. Mr. Prygocki holds a B.S. in accounting from Pace University. Our board of directors believesthat Mr. Prygocki’s operating experience and financial expertise in the biopharmaceutical industry, combined with his prior financial and board positions, make himqualified to serve on our board of directors.Jonathan Tunnicliffe , age 50, has served as a director of our company since May 2011. He is currently a Partner of NovaQuest Capital Management, L.L.C., aninvestment firm that focuses on the biopharmaceutical sector, a position he has held since November 2010. From 2000 until 2010, he was global head of due diligence forthe NQ business unit of Quintiles Transnational, a contract research company. Mr. Tunnicliffe was previously a founding member and Director of Operations of aspecialized clinical research organization, S-Cubed Inc. In Mr. Tunnicliffe’s earlier career, he was a medical statistician at SmithKline and French (now Glaxo SmithKline)and at the University of Sheffield. Mr. Tunnicliffe holds a B.Sc. in Mathematical Statistics from the University of Liverpool, a Master of Science in Medical Statistics fromthe University of Newcastle-upon-Tyne and an M.B.A. from Sheffield Hallam University. He also holds a Postgraduate Diploma in Marketing from the Chartered Instituteof Marketing in the United Kingdom. Our board of directors believes that Mr. Tunnicliffe’s medical, biopharmaceutical investment and operating experience, combinedwith his prior board positions, make him qualified to serve on our board of directors.Ronald Wooten , age 56, has served as a director of our company since October 2013. Mr. Wooten has been a partner of NovaQuest Capital Management, L.L.C., aninvestment firm that focuses on the biopharmaceutical sector, since its inception in November 2010, and has been the head of the investment committee of the GeneralPartner of NovaQuest Pharma Opportunities Fund III. From 2000 until November 2010, he was president for the NovaQuest business unit of Quintiles Inc., a contractresearch company. Mr. Wooten was previously Executive Vice President of Quintiles and served on its board of directors from January 2008 to November 2010.Mr. Wooten’s previous experience includes nine years with First Union Securities, where he served as a Managing Director of Investment Banking. Mr. Wooten holds aB.A. degree in Chemistry from the University of North Carolina at Chapel Hill and an M.B.A. from Boston University. Our board of directors believes that Mr. Wooten’sbiopharmaceutical, investment and operating experience, combined with his prior board positions, make him qualified to serve on our board of directors.Class III DirectorsL. Daniel Browne , age 54, is one of our co-founders and has served as our President and Chief Executive Officer and a member of our board of directors since wecommenced operations in 2002. Mr. Browne served as President and Chief Executive Officer of Neomend, Inc., a medical technology and biomaterials company, from2001 to 2003. From 1997 through 2000, Mr. Browne served as President of Prograft Medical Inc., a medical technology company. Previously, Mr. Browne served for morethan 16 years in leadership positions in product development, sales and marketing and business development in the Gore Medical Products Division of W.L. Gore &Associates, Inc., a global technology company, lastly as Business Leader in the Medical Products Division. Mr. Browne holds a B.S. from the University of Hawaii in Celland Molecular Biology and an M.B.A. from Pepperdine University. Our board of directors believes that Mr. Browne is qualified to serve on our board of directors based onsuch experience and leadership roles, and his management perspective of the company, including our86Table of Contentsstrategic opportunities and challenges and his track record of new product development, sales and marketing and value creation, each of which relates to our commercialopportunities.Robert Byrnes , age 71, has served as a director of our company since August 2004. Mr. Byrnes has spent over forty years in the medical device and biotechnologyindustries. From October 1997 until October 2002, and from January 2005 to the present, Mr. Byrnes has served as the President and Chief Executive Officer of Roan, Inc.,an advisory service for healthcare organizations. From November 2002 to January 2005, he served as the President and Chief Executive Officer of Thermage, Inc., amedical device company focused on non-invasive tissue tightening. Mr. Byrnes has also served as Chairman and Chief Executive Officer of Tokos Medical Corporation, ahealthcare services company, President of Caremark, Inc., a home healthcare service company, and Vice President of Marketing and Business Development for Genentech,Inc., a biotechnology company. Mr. Byrnes holds a B.S. in Pharmacy from Ferris State University and an M.B.A degree in Marketing and Finance from Loyola University,Chicago. Our board of directors believes that Mr. Byrnes’s operating experience in the medical device and biotechnology industries, combined with his prior boardpositions, make him qualified to serve on our board of directors.Philip J. Vickers, Ph.D. , age 56, has served as a director of our company since February 2015. Dr. Vickers has over 25 years in the pharmaceutical industryexperience. Since 2011, he has been serving as Global Head of Research and Development at Shire where he is responsible for overseeing preclinical research anddevelopment, clinical research, regulatory affairs, and medical affairs. He oversees the organization’s growing product portfolio and plays a key role in developing andexecuting Shire’s global business strategy. Dr. Vickers is a member of Shire’s Executive and Pipeline Committees. Prior to Shire, he was Chief Scientific Officer andPresident at Resolvyx Pharmaceuticals, or Resolvyx, a biopharmaceutical company, from 2009 and 2011 where he was a member of the board of directors, withaccountability for all preclinical and clinical research, as well as partnering with investors, external business development partners, and establishing external collaborations.Prior to Resolvyx, he served in various capacities with international biopharmaceutical companies including Boehringer-Ingelheim Pharmaceuticals Inc., Pfizer and MerckFrosst Centre. Dr. Vickers holds a Ph.D. in Biochemistry from the University of Toronto, and a Bachelor of Science degree in Applied Biochemistry from the University ofSalford, Manchester. He was also a Visiting Fellow at the National Cancer Institute in Bethesda, Maryland. Our board of directors believes that Dr. Vickers' experience atmultiple pharmaceutical companies and his expertise in the development and commercialization of pharmaceutical products make him qualified to serve on our board ofdirectors.Executive OfficersThe following table sets forth information concerning our executive officers as of March 4, 2016: NameAgePosition(s)Executive Officers L. Daniel Browne54President, Chief Executive Officer and DirectorAbhay Joshi, Ph.D.53Chief Operating OfficerCurtis Ruegg, Ph.D.53Executive Vice President, Technical OperationsLauren P. Silvernail57Chief Financial Officer and Chief Business OfficerL. Daniel Browne . Mr. Browne’s biography is included above under the section titled “— Board of Directors — Class III Directors.”Abhay Joshi , Ph.D. has served our Chief Operating Officer since December 2015. Dr. Joshi brings over twenty years of global experience as a pharmaceutical andbiotechnology executive. From March of 2007 to December 2015, Dr. Joshi served as the President and Chief Executive Officer of Alvine Pharmaceuticals, Inc., apharmaceutical company developing therapeutic products for the treatment of autoimmune and inflammatory diseases, where he was responsible for overseeing all aspectsof the company's business. Prior to Alvine Pharmaceuticals, he served as an Executive Vice President, Chief Technical Officer and member of the Executive Committee atCoTherix, Inc., which was acquired by Actelion Ltd in 2007. Prior to CoTherix, Dr. Joshi was the Vice President of Global Technical Operations, SpecialtyPharmaceuticals at Allergan, Inc., where he was responsible for the company’s global biologics manufacturing operations for BOTOX® and its Latin America and AsiaPacific pharmaceutical operations, and held a series of senior management positions. Dr. Joshi currently serves on the board of directors of Genyous Biomed International.Dr. Joshi received his BTech in Chemical Engineering from the Indian Institute of Technology, New Delhi, an MSE and a Ph.D. in Chemical Engineering from theUniversity of Michigan, Ann Arbor, and an MBA from the University of California, Irvine.87Table of ContentsCurtis Ruegg, Ph.D. has served as our Executive Vice President, Technical Operations since September 2006. Previously, Dr. Ruegg has held management andresearch and development positions at CoTherix, Inc., a biopharmaceutical company, from 2004 to 2006. From 2002 to 2004, Dr. Ruegg was Vice President of Preclinicaland Process Development at InterMune, Inc., a biotechnology company. From 1999 to 2001, Dr. Ruegg was Vice President of Research and Development at AP Cells, Inc.,a medical product supply company. From 1993 to 1998, Dr. Ruegg served as Group Leader and Senior Scientist at Dendreon Corporation, a biotechnology company.Dr. Ruegg is a member of the American Association of Immunologists and the American Association for the Advancement of Science. Dr. Ruegg holds a B.S. in toxicologyfrom the University of California, Davis and a Ph.D. in pharmacology from Johns Hopkins University School of Medicine.Lauren P. Silvernail has served as our Chief Financial Officer and Chief Business Officer since December 2015 and Chief Financial Officer and Executive VicePresident, Corporate Development from March 2013 to December 2015. From 2003 to 2012, Ms. Silvernail was Chief Financial Officer and Vice President of CorporateDevelopment at ISTA Pharmaceuticals, Inc., a pharmaceutical research and development company. During her tenure at ISTA, revenues grew to more than $160 millionand headcount increased to more than 340 employees by the time ISTA was purchased by Bausch & Lomb in June 2012. From 1995 to 2003, Ms. Silvernail served invarious operating and corporate development positions with Allergan, Inc., a pharmaceutical company, including Vice President, Business Development. Prior to joiningAllergan, Inc., Ms. Silvernail worked at Glenwood Ventures, an investment firm, as a General Partner. Ms. Silvernail holds a B.A. in Biophysics from the University ofCalifornia, Berkeley and an M.B.A. from the Anderson Graduate School of Management at the University of California, Los Angeles.Governance and Board CompositionBoard Committees . Our board of directors has an audit committee, a compensation committee, a nominating and corporate governance committee and a science andtechnology committee. Our board of directors may establish other committees to facilitate the management of our business. Members serve on these committees until theirresignation or until otherwise determined by our board of directors.Audit Committee . Our audit committee currently consists of Mr. Byrnes, Mr. Prygocki, and Dr. Glasheen. Our board of directors has determined that all currentmembers of our audit committee satisfy the independence requirements under the NASDAQ listing rules and Rule 10A-3(b)(1) of the Exchange Act. Each member of theaudit committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and NASDAQ. The chair of our audit committee is MarkA. Prygocki, Sr. Our board of directors has determined that each of Messrs. Byrnes and Prygocki is an “audit committee financial expert” within the meaning of the SECregulations. Our board of directors has determined that the composition of our audit committee meets the criteria for independence under, and the functioning of our auditcommittee complies with, the applicable requirements of the Sarbanes-Oxley Act, applicable requirements of the NASDAQ listing rules and SEC rules and regulations. Weintend to continue to evaluate the requirements applicable to us and comply with future requirements to the extent that they become applicable to our audit committee. Theprincipal duties and responsibilities of our audit committee include: •appointing and retaining an independent registered public accounting firm to serve as independent auditor to audit our Consolidated Financial Statements,overseeing the independent auditor’s work and determining the independent auditor’s compensation;•approving in advance all audit services and non-audit services to be provided to us by our independent auditor;•establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls, auditing orcompliance matters, as well as for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters;•reviewing and discussing with management and our independent auditor the results of the annual audit and the independent auditor’s review of our quarterlyConsolidated Financial Statements; and•conferring with management and our independent auditor about the scope, adequacy and effectiveness of our internal accounting controls, the objectivity ofour financial reporting and our accounting policies and practices.Director Nominations. The nominating and corporate governance committee of the board of directors, to date, has not adopted a formal policy with regard to theconsideration of director candidates recommended by stockholders and will consider director candidates recommended by stockholders on a case-by-case basis, asappropriate. Stockholders wishing to recommend individuals for consideration by the nominating and corporate governance committee may do so by delivering a written88Table of Contentsrecommendation to our Secretary at 7555 Gateway Boulevard, Newark, California 94560 and providing the candidate’s name, biographical data and qualifications and adocument indicating the candidate’s willingness to serve if elected. The nominating and corporate governance committee does not intend to alter the manner in which itevaluates candidates based on whether the candidate was recommended by a stockholder or not. To date, the nominating and corporate governance committee has notreceived any such nominations nor has it rejected a director nominee from a stockholder or stockholders holding more than 5% of our voting stock.Code of Business Conduct . Our board of directors adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers, including ourprincipal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions and agents and representatives,including directors and consultants. The full text of our Code of Business Conduct and Ethics is posted on our website at www.revance.com. We intend to disclose futureamendments to certain provisions of our Code of Business Conduct and Ethics, or waivers of such provisions applicable to any principal executive officer, principalfinancial officer, principal accounting officer or controller, or persons performing similar functions, and our directors, on our website identified above.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our directors and executive officers, and persons who own morethan ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock andother equity securities of our company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of allSection 16(a) forms they file.To the best of our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required,during the fiscal year ended December 31, 2015, all of our officers, directors and greater than ten percent beneficial owners complied with all Section 16(a) filingrequirements applicable to them , except that Form 4s reporting annual option grants on May 7, 2015 to our non-employee directors were filed on May 14, 2015 and May15, 2015.89Table of ContentsITEM 11.EXECUTIVE COMPENSATIONOur named executive officers, or NEOs, consisting of our principal executive officer and the next two most highly compensated executive officers during 2015, are: •L. Daniel Browne, President and Chief Executive Officer;•Lauren P. Silvernail, Chief Financial Officer and Chief Business Officer; and•Abhay Joshi, Ph.D., Chief Operating Officer.Summary Compensation TableThe following table sets forth all of the compensation awarded to, earned by or paid to our NEOs during 2015 and 2014. Name and Principal PositionYearSalary($) Bonus($) Stock AwardsOptionAwards($) (2)Nonequity IncentivePlan Compensation (1)All OtherCompensation($) Total($)L. Daniel Browne2015$482,000 $— $706,005$2,309,582$278,355$— $3,775,942President and ChiefExecutive Officer2014$452,352 $— $3,093,120$5,207,855$158,323$44,003(6) $8,955,653Lauren P. Silvernail2015$362,505 $— $118,317$387,054$150,780$67,392(5) $1,086,048Chief Financial Officer andChief Business Officer2014$323,440 $— $451,080$757,058$124,524$67,461(7) $1,723,563Abhay Joshi, Ph.D.2015$21,718(3) $—(4) $1,248,500$4,340,387$—$— $5,610,605Chief Operating Officer (1)Amounts shown in this column represent cash bonus awards granted to our NEOs under our annual incentive plan. Such bonuses are tied to achievement againstclinical and financial goals that are set in the first quarter of the applicable fiscal year, with payouts determined after the close of the year and primarily based onour level of achievement against those goals. (2)The dollar amounts in this column represent the aggregate grant date fair value of all option awards granted during the indicated year. These amounts have beencalculated in accordance with FASB ASC Topic 718, or ASC 718, using the Black-Scholes option-pricing model and excluding the effect of estimated forfeitures.For a discussion of valuation assumptions, see Note 16 to our financial statements and the discussion under “Management’s Discussion and Analysis of FinancialCondition and Results of Operations — Critical Accounting Policies and Estimates — Stock-Based Compensation” included elsewhere in this Form 10-K. Theseamounts do not necessarily correspond to the actual value that may be recognized from the option awards by the NEOs.(3)Dr. Joshi's annual base salary for 2015 was $440,000. The amount shown reflects the salary earned from his date of hire in December 2015 through December 31,2015.(4)A $200,000 signing bonus will be paid in installments in 2016.(5)Represents taxable fringe benefits for housing and travel.(6)Includes payout of $43,494 for excess vacation and $509 in other taxable benefits.(7)Includes taxable fringe benefits of $66,887 for housing and travel and $574 in other taxable benefits.Outstanding Equity Awards at December 31, 2015The following table provides information regarding outstanding equity awards held by each of our NEOs as of December 31, 2015. 90Table of Contents Option AwardsStock Awards Number ofSecuritiesUnderlyingUnexercisedOptions (#)ExercisableNumber ofSecuritiesUnderlyingUnexercisedOptions (#)UnexercisableOptionExercisePrice ($)OptionExpirationDateNumber ofShares that HaveNot VestedMarket Value ofShares That HaveNot VestedL. Daniel Browne20,000—$2.554/29/2018—— 24,621—$2.557/20/2020—— 192,942 (1)105,808$8.705/26/2023—— 49,791 (2)49,792$9.1512/16/2023—— 117,087 (3)178,713$32.225/18/2024—— 56,489 (4)190,011$16.231/27/2025—— ——$——64,000 (5)$2,186,240 ——$—043,500 (6)$1,485,960Lauren P. Silvernail66,256 (7)30,117$8.705/23/2023—— 17,020 (3)25,980$32.225/18/2024—— 9,466 (4)31,844$16.231/27/2025—— ——$——9,334 (5)$318,849 ——$——7,290 (6)$249,026Abhay Joshi, Ph.D.666—$6.609/18/2016—— 666—$4.204/28/2019—— 666—$2.554/29/2018—— —206,250 (8)$36.3212/13/2025—— ——$——34,375 (9)$1,174,250 (1)This option was granted on May 27, 2013. The shares subject to the stock option vest over a four year period, with one-forty-eighth of the shares vesting eachmonth, subject to providing continued service to us through each vesting date.(2)This option was granted on December 17, 2013. The shares subject to the stock option vest over a four year period, with one-forty-eighth of the shares vesting eachmonth, subject to providing continued service to us through each vesting date.(3)This option was granted on May 19, 2014. The shares subject to the stock option vest over a four year period, with one-forty-eighth of the shares vesting eachmonth, subject to providing continued service to us through each vesting date.(4)This option was granted on January 28, 2015. The shares subject to the stock option vest over a four year period, with one-forty-eighth of the shares vesting eachmonth, subject to providing continued service to us through each vesting date.(5)This restricted stock award was granted on May 19, 2014. The shares subject to the stock award vest over a three year period, with one-third of the shares vestingeach year, subject to providing continued service to us through each vesting date.(6)This restricted stock award was granted on January 28, 2015. The shares subject to the stock award vest over a three year period, with one-third of the sharesvesting each year, subject to providing continued service to us through each vesting date.(7)This option was granted on May 24, 2013. The shares subject to the stock option vest over a four year period, with 25% vesting on March 18, 2014 and the balancevesting each month over the remaining three-year period, subject to providing continued service to us through each vesting date.(8)This option was granted on December 14, 2015. The shares subject to the stock option vest over a four year period, with 25% vesting on December 14, 2016 andthe balance vesting each month over the remaining three-year period, subject to providing continued service to us through each vesting date.(9)This restricted stock award was granted on December 14, 2015. The shares subject to the stock award vest over a four year period, with one-fourth of the sharesvesting each year, subject to providing continued service to us through each vesting date.91Table of ContentsExecutive Employment ArrangementsWe have entered into employment agreements with each of our named executive officers; these agreements have no specific term of employment and provide for at-will employment. Each employment agreement provides the NEO with an annual base salary and target bonus opportunity, eligibility for employee benefits offered to ourother employees, as well as eligibility under our Executive Severance Plan, described below. The target annual bonus opportunity (expressed as a percentage of base salary)for Mr. Browne was 55% for 2015 and was increased to 66% for 2016; for Ms. Silvernail, was 40% for 2015 and was increased to 45% for 2016; and for Dr. Joshi, was45% for 2016.Severance and Change of Control BenefitsEach of our NEOs is eligible for our Executive Severance Plan, which provides severance benefits in the event of certain qualifying terminations of employment,subject to the executive’s execution of a waiver and release of claims in favor of the company.Under the Severance Plan, upon an involuntary termination of a participant other than for cause, and where such termination is not within 12 months following achange of control, the benefits provided under the Severance Plan consist of: (i) salary continuation payments for 15 months in the case of our chief executive officer, andfor nine months in the case of the other named executive officers; and (ii) payment by us of COBRA premiums for the participant and his eligible dependents for a period ofup to 15 months in the case of our chief executive officer, and up to nine months in the case of the other NEOs.For a period of 12 months following a change in control, if we involuntarily terminate a participant for any reason other than cause, or the participant resigns for“good reason” (each as defined in the Severance Plan), then the benefits provided by the Severance Plan will consist of: (i) a lump sum payment equal to the sum of theparticipant’s monthly base salary and monthly annual target bonus, multiplied by 21 in the case of our chief executive officer, and by 12 in the case of the other NEOs;(ii) payment of COBRA premiums for the named executive officer and his eligible dependents for a period of up to 21 months in the case of our chief executive officer, andup to 12 months in the case of the other NEOs; and (iii) accelerated vesting of all unvested stock options then held by the NEO.Under the Severance Plan, a “change of control” is defined the same way it is under our 2014 Equity Incentive Plan.If any of the benefits provided under the Severance Plan would constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of1986, as amended, or the Code, such that the payments would become subject to the excise tax imposed by Section 4999 of the Code, then the payments will either be paidin full to the participant, or reduced so that a smaller amount or no portion of such benefits will be subject to the excise tax, whichever provides the greater after-tax benefitto the participant.Employee Benefit Plans401(k) PlanWe sponsor a 401(k) retirement plan in which our named executive officers participate on the same basis as our other U.S. employees. No matching or other companycontributions were made under this plan during the year ended December 31, 2015.Pension BenefitsWe do not maintain a defined benefit pension plan for any of our employees.Nonqualified Deferred CompensationWe do not maintain a plan providing nonqualified deferred compensation for any of our employees.2015 Director Compensation TableThe compensation provided to our non-employee directors in 2015 is enumerated in the table below. Mr. Browne, who is also one of our employees, did not and willnot receive any compensation for his services as a director.92Table of ContentsThe following table sets forth a summary of the compensation received during the year ended December 31, 2015: NameFees Earned ($)StockOptions($)* Total ($)Robert Byrnes63.7586.77(1) 150.52Ronald W. Eastman44.3786.77(2) 131.13Phyllis Gardner, M.D.46.6186.77(3) 133.37James Glasheen, Ph.D.47.0086.77(4) 133.77Mark A. Prygocki59.5086.77(5) 146.27Angus C. Russell72.0086.77(6) 158.77Jonathan Tunnicliffe41.6186.77(7) 128.37Philip J. Vickers, Ph.D.38.62248.70(8) 287.32Ronald Wooten39.5086.77(9) 126.27 *The dollar amounts in this column represent the grant date fair value of the stock option award. These amounts have been calculated in accordance with ASC 718using the Black-Scholes option-pricing model and excluding the effect of estimated forfeitures. For a discussion of valuation assumptions, see Note 16 to ourfinancial statements and the discussion under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — CriticalAccounting Policies and Estimates — Stock-Based Compensation” included elsewhere in this Form 10-K. These amounts do not necessarily correspond to theactual value that may be recognized from the option awards by the applicable directors.(1)As of December 31, 2015, Mr. Byrnes had options to purchase 50,332 shares of our common stock.(2)As of December 31, 2015, Mr. Eastman had options to purchase 16,000 shares of our common stock.(3)As of December 31, 2015, Dr. Gardner had options to purchase 21,333 shares of our common stock.(4)As of December 31, 2015, Dr. Glasheen had options to purchase 16,000 shares of our common stock.(5)As of December 31, 2015, Mr. Prygocki had options to purchase 26,000 shares of our common stock.(6)As of December 31, 2015, Mr. Russell had options to purchase 26,000 shares of our common stock.(7)As of December 31, 2015, Mr. Tunnicliffe had options to purchase 16,000 shares of our common stock.(8)Dr. Vickers joined our board of directors in February 2015. As of December 31, 2015, Dr. Vickers had options to purchase 26,000 shares of our common stock.(9)As of December 31, 2015, Mr. Wooten had options to purchase 16,000 shares of our common stock.Non-employee Director CompensationIn December 2013, our board of directors approved a non-employee director compensation policy that became effective upon the completion of our IPO, which wassubsequently amended effective as of July 30, 2015 and as of January 1, 2016.Under this policy, we pay each of our non-employee directors a cash retainer for service on the board of directors and for service on each committee on which thedirector is a member. The chairman of each committee receives a higher retainer for such service. These retainers are payable in arrears in four equal quarterly installmentson the last day of each quarter, provided that the amount of such payment will be prorated for any portion of such quarter that the director is not serving on our board ofdirectors. The retainers paid to non-employee directors for service on the board of directors and for service on each committee of the board of directors on which thedirector is a member are as follows: MemberAnnual ServiceRetainer Chairman AdditionalAnnual ServiceRetainerBoard of Directors$39,500 $34,500Audit Committee7,500 12,500Compensation Committee5,000 7,250Nominating and Corporate Governance Committee4,500 3,500Science & Technology Committee5,000 7,25093Table of ContentsIn addition, on the date of each annual meeting of stockholders held, each non-employee director that continues to serve as a non-employee member on our board ofdirectors will receive an option to purchase 8,000 shares of our common stock. The exercise price of these options will equal the fair market value of our common stock onthe date of grant, and these options will vest on the one year anniversary of the grant date, subject to the director’s continued service as a director. This policy is intended toprovide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests withthose of our stockholders.Directors have been and will continue to be reimbursed for expenses directly related to their activities as directors, including attendance at board and committeemeetings. Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in our certificate of incorporationand bylaws.Compensation Committee Interlocks and Insider ParticipationDuring the fiscal year ended December 31, 2015, Mr. Byrnes and Dr. Gardner served on the compensation committee, with Mr. Byrnes serving as its chair. NeitherMr. Byrnes nor Dr. Gardner are currently nor have been at any time one of our employees. None of our executive officers currently serves, or has served during the lastyear, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directorsor compensation committee.94Table of ContentsITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSEquity Compensation Plan InformationThe following table provides certain information with respect to our equity compensation plans in effect as of December 31, 2015. Plan CategoryNumber of securities to beissued upon exerciseof outstanding options,warrants and rights(a) Weighted-average exerciseprice of outstanding options,warrants and rights(b) (3) Number of securitiesremaining availablefor issuance underequity compensation plans(excludingsecurities reflected in column (a))(c)Equity compensation plans approved by securityholders: (1)2,103,261 $18.36 670,608 (4)Equity compensation plans not approved by securityholders: (2)316,844 $31.46 449,889Total2,420,105 $20.08 1,120,497 (1)Includes securities issuable under the 2002 Equity Incentive Plan, the 2012 Equity Incentive Plan, the 2014 Equity Incentive Plan, or the 2014 plan, and the 2014Employee Stock Purchase Plan, or the 2014 ESPP.(2)Includes securities issuable under the 2014 Inducement Plan adopted exclusively for grants of awards to individuals that were not previously our employees ordirectors, as an inducement material to the individual’s entry into employment with us within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules. (3)The weighted average exercise price excludes restricted stock awards, which have no exercise price.(4)Includes (i) 273,948 shares of common stock available for issuance under our 2014 plan and (ii) 396,660 shares of common stock available for issuance under our2014 ESPP. The number of shares of our common stock reserved for issuance under the 2014 plan automatically increases on January 1st of each year, starting onJanuary 1, 2015 and continuing through January 1, 2024, by 4% of the total number of shares of our common stock outstanding on December 31 of the precedingcalendar year, or such lesser number of shares of common stock as determined by our Board of Directors. The maximum number of shares that may be issuedpursuant to the exercise of incentive stock options under the 2014 plan is 2,000,000 shares. The number of shares of our common stock reserved under the 2014ESPP for issuance automatically increases on January 1st each year, starting January 1, 2015 and continuing through January 1, 2024, in an amount equal to thelower of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, and (ii) 300,000 shares of commonstock, or such lesser number of shares of common stock as determined by our Board of Directors. If a purchase right granted under our 2014 ESPP terminateswithout having been exercised, the shares of our common stock not purchased under such purchase right will be available for issuance under our 2014 ESPP.Security Ownership of Certain Beneficial Owners and ManagementThe following table sets forth certain information regarding the ownership of our common stock as of January 15, 2016 by: (i) each director; (ii) each namedexecutive officer; (iii) all of our executive officers and directors as a group; and (iv) all those known by us to be beneficial owners of more than five percent of our commonstock. We are aware that one or more institutional investors purchased a number of shares of our common stock in amounts representing in excess of five percent of ourcommon stock as of January 15, 2016, and as a result, one or more of such institutional investors may continue to beneficially own in excess of five percent of our commonstock as of January 15, 2016. However, as of the date of this Form 10-K, other than as disclosed below, we are not aware of any filings made with the SEC with respect tothe beneficial ownership of our common stock by such institutional investors and we were otherwise unable to verify the beneficial ownership of our common stock by anysuch institutional investor as of the date of this Form 10-K.Beneficial ownership is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting orinvestment power. Shares of common stock issuable under options or warrants that are exercisable within 60 days after January 15, 2016, are deemed beneficially ownedand such shares are used in computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding for the purpose of95Table of Contentscomputing the percentage ownership of any other person. The percentage of beneficial ownership is based on 28,291,267 shares of our common stock outstanding as ofJanuary 15, 2016.The information contained in the following table is not necessarily indicative of beneficial ownership for any other purpose and the inclusion of any shares in the tabledoes not constitute an admission of beneficial ownership of those shares.Unless otherwise indicated below, to our knowledge, all persons named in the table have sole voting and dispositive power with respect to their shares of commonstock, except to the extent authority is shared by spouses under community property laws. Unless otherwise indicated below, the address of each beneficial owner listed inthe table below is c/o Revance Therapeutics, Inc., 7555 Gateway Blvd., Newark, CA 94560. Beneficial OwnershipName of Beneficial OwnerNumber ofSharesPercentageof TotalNamed Executive Officers and Directors: L. Daniel Browne (1)719,2072.50%Abhay Joshi (2)36,373*Lauren P. Silvernail (3)123,026*Robert Byrnes (4)44,998*Ronald W. Eastman (5)4,142,96214.64%Phyllis Gardner, M.D. (6)13,333*James Glasheen, Ph.D. (7)734,0142.59%Mark A. Prygocki (8)18,000-Angus C. Russell (9)18,000*Jonathan Tunnicliffe (10)3,112,65011.00%Philip J. Vickers, Ph.D. (11)18,000*Ronald Wooten (10)3,112,65011.00%Directors and officers as a group (total of 13 persons) (12)9,066,32431.15%Greater than 5% Stockholders: Entities affiliated with Essex VIII (5)4,142,96214.64%Entities affiliated with NovaQuest (10)3,112,65011.00%Entities affiliated with Franklin Resources (13)3,178,89511.24%Entities affiliated with JPMorgan Chase & Co. (14)2,937,14210.38%Entities affiliated with The Bank of New York Mellon Corporation (15)2,009,5677.10%Entities affiliated with BlackRock, Inc. (16)1,564,6915.53% * Represents beneficial ownership of less than 1% of the outstanding common stock(1)Consists of 218,677 shares of common stock and 500,121 shares of common stock underlying options that are vested and exercisable within 60 days of January 15,2016 and 409 shares of common stock held by the Dan and Brenda Browne Living Trust. Mr. Browne is a Trustee of the Dan and Brenda Browne Living Trust.(2)Consists of 34,375 shares of common stock and 1,998 shares of common stock underlying options that are vested and exercisable within 60 days of January 15,2016.(3)Consists of 22,758 shares of common stock and 100,268 shares of common stock underlying options that are vested and exercisable within 60 days of January 15,2016.(4)Consists of 2,666 shares of common stock and 42,332 shares of common stock underlying options that are vested and exercisable within 60 days of January 15,2015.(5)Consists of 8,000 shares of common stock underlying options held by Mr. Eastman that are vested and exercisable within 60 days of January 15, 2016, 3,747,332shares of common stock held by Essex Woodlands Health Ventures Fund VIII, L.P. (“Essex Fund VIII”), 270,172 shares of common stock held by EssexWoodlands Health Ventures Fund VIII-A, L.P. (“Essex Fund VIII-A”) and 117,458 shares of common stock held by Essex Woodlands Health Ventures Fund VIII-B, L.P. (“Essex Fund VIII-B”). Essex Woodlands Health Ventures VIII, LLC, the general partner of Essex Fund VIII, Essex Fund VIII-A and Essex Fund VIII-B,may be deemed to have sole power to vote and sole power to dispose of shares directly owned by Essex Fund VIII, Essex Fund VIII-A and Essex Fund VIII-B.Ronald W. Eastman, one of our directors, is a managing member of Essex Woodlands Health Ventures VIII, LLC and may be96Table of Contentsdeemed to have shared voting power and shared power to dispose of the shares held by Essex Fund VIII, Essex Fund VIII-A and Essex Fund VIII-B. The addressfor Essex Fund VIII is 21 Waterway Avenue, Suite 225, The Woodlands, Texas 77380.(6)Consists of 13,333 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2016.(7)Consists of 8,000 shares of common stock underlying options held by Mr. Glasheen that are vested and exercisable within 60 days of January 15, 2016, 16,852shares of common stock held by Technology Partners Affiliates VII, L.P. (“TPA”) and 709,162 shares of common stock held by Technology Partners Fund VII,L.P. (“TPF”). TP Management VII, L.L.C., the general partner of TPA and TPF, may be deemed to have sole power to vote and sole power to dispose of sharesdirectly owned by TPA and TPF. James Glasheen, one of our directors, is a managing member of TP Management VII, L.L.C. and may be deemed to have sharedvoting power and shared power to dispose of the shares held by TPA and TPF. The address for Technology Partners is 550 University Avenue, Palo Alto,California 94301.(8)Consists of 18,000 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2016.(9)Consists of 18,000 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2016.(10)Consists of 8,000 shares of common stock underlying options held by Mr. Tunnicliffe that are vested and exercisable within 60 days of January 15, 2016, 8,000shares of common stock underlying options held by Mr. Wooten that are vested and exercisable within 60 days of January 15, 2016, and 3,096,650 shares ofcommon stock held by NovaQuest Pharma Opportunities Fund III, L.P. (“NovaQuest”). Under NovaQuest's partnership agreement, Messrs. Tunnicliffe andWooten are deemed to hold the options for the benefit of NovaQuest, and must exercise the options solely upon the direction of NovaQuest, which is entitled to theshares issued upon exercise. NQ HCIF General Partner, L.P., as the general partner of NovaQuest (the “NovaQuest GP”), has the power to vote and dispose ofshares directly owned by NovaQuest, and NQ HCIF GP Ltd., as the general partner of the NovaQuest GP (the “NovaQuest GP Ltd.”), has the power to direct theNovaQuest GP as to such voting and disposition. Decisions with respect to the voting and disposition of the shares held by NovaQuest are made by an investmentcommittee of the NovaQuest GP Ltd., on which Jonathan Tunnicliffe and Ronald Wooten, two of our directors, each serve. Ronald Wooten also serves on theboard of directors of the NovaQuest GP Ltd. Pursuant to these positions, Jonathan Tunnicliffe and Ronald Wooten may be deemed to have shared voting powerand shared power to dispose of the shares held by NovaQuest. The NovaQuest GP, the NovaQuest GP Ltd., each member of the investment committee,Mr. Tunnicliffe and Mr. Wooten disclaims beneficial ownership of the shares held by NovaQuest except to the extent of his or its pecuniary interest therein. Theaddress for each of the foregoing persons and entities is 4208 Six Forks Road, Suite 920, Raleigh, North Carolina 27609.(11)Consists of 18,000 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2016.(12)Includes shares beneficially owned by all current executive officers and directors of the company. Consists of 8,254,538 shares of common stock and 811,786shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2016.(13)The indicated ownership is based on a Schedule 13G filed with the SEC by the reporting persons on February 10, 2016, reporting beneficial ownership as ofDecember 31, 2015. According to the Schedule 13G, the reporting persons beneficially own a total of 3,178,895 shares of Common Stock held by FranklinResources, Inc. (“FRI”), Franklin Advisers, Inc., Charles B. Johnson and Rupert H. Johnson, Jr. The Schedule 13G filed by the reporting persons providesinformation only as of December 31, 2015, and, consequently, the beneficial ownership of the above-mentioned reporting persons may have changed betweenDecember 31, 2015 and January 15, 2016. The address for each of the foregoing persons and entities is One Franklin Parkway, San Mateo, CA 94403.(14)The indicated ownership is based on a Schedule 13G/A filed with the SEC by the reporting persons on January 21, 2016, reporting beneficial ownership as ofDecember 31, 2015. According to the Schedule 13G/A, the reporting persons beneficially own a total of 2,937,142 shares of Common Stock held by JPMorganChase & Co. and its wholly owned subsidiaries JPMorgan BankChase, National Association, J.P. Morgan Investment Management Inc., JPMorgan AssetManagement (UK) Limited and J.P. Morgan Securities LLC. The Schedule 13G/A filed by the reporting persons provides information only as of December 31,2015, and, consequently, the beneficial ownership of the above-mentioned reporting persons may have changed between December 31, 2015 and January 15, 2016.The address for each of the foregoing persons and entities is 270 Park Ave. New York, NY 10017.(15)The indicated ownership is based on a Schedule 13G filed with the SEC by the reporting persons on January 26, 2016, reporting beneficial ownership as ofDecember 31, 2015. According to the Schedule 13G, the reporting persons beneficially own a total of 2,009,567 shares of Common Stock held by The Bank ofNew York Mellon Corporation and its following affiliates: The Bank of New York Mellon, The Boston Company Asset Management LLC, The DreyfusCorporation (parent holding company of MBSC Securities Corporation), Mellon Capital Management Corporation, MAM (MA) Holding Trust (parent holdingcompany of Standish Mellon Asset Management Company97Table of ContentsLLC; The Boston Company Asset Management LLC) and MBC Investments Corporation (parent holding company of Mellon Capital Management Corporation;BNY Mellon Investment Management (Jersey) Ltd.). The Schedule 13G filed by the reporting persons provides information only as of December 31, 2015, and,consequently, the beneficial ownership of the above-mentioned reporting persons may have changed between December 31, 2015 and January 15, 2016. Theaddress for each of the foregoing persons and entities is 225 Liberty Street, New York, NY 10286.(16)The indicated ownership is based on a Schedule 13G filed with the SEC by the reporting persons on January 28, 2016, reporting beneficial ownership as ofDecember 31, 2015. According to the Schedule 13G, the reporting persons beneficially own a total of 1,564,691 shares of Common Stock held by BlackRock Inc.and its subsidiaries BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock AssetManagement Schweiz AG, BlackRock Fund Advisors, BlackRock Institutional Trust Company, N.A. and BlackRock Investment Management, LLC. TheSchedule 13G filed by the reporting persons provides information only as of December 31, 2015, and, consequently, the beneficial ownership of the above-mentioned reporting persons may have changed between December 31, 2015 and January 15, 2016. The address for each of the foregoing persons and entities is 55East 52nd Street, New York, NY 10055.98Table of ContentsITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe following is a summary of transactions since January 1, 2015 in which (i) we have been a participant, (ii) the amount involved exceeded or will exceed $120,000,and (iii) any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of their immediate family or person sharing their household,had or will have a direct or indirect material interest, other than compensation arrangements which are described under “Item 11. Executive Compensation.”Resale RegistrationResale Registration . In October 2015, we filed a registration statement on Form S-3, which was declared effective in November 2015, registering the resale of anaggregate of 8,414,711 shares of our common stock held by certain of our stockholders, which include entities affiliated with Essex Fund VIII, NovaQuest and TechnologyPartners. Ronald W. Eastman, a member of our board of directors, is a managing director of Essex Woodlands Health Ventures VIII, LLC, the general partner of EssexFund VIII, Essex Fund VIII-A and Essex Fund VIII-B; Jonathan Tunnicliffe and Ronald Wooten, each a member of our board of directors, are both affiliated with theNovaQuest GP, the general partner of NovaQuest; and James Glasheen, a member of our board of directors, is a managing member of TP Management VII, L.L.C., thegeneral partner of TPA and TPF. In connection with the resale registration, we entered into a Waiver of Registration Rights and Notice, effective as of October 16, 2015,with the selling stockholders, pursuant to which we were obligated to pay the reasonable fees and expenses of the counsel for the selling stockholders up to $30,000 and theregistration expenses we incur. Consistent with our audit committee charter, our full board of directors reviewed and approved these transactions.Indemnification Agreements . We have entered, or will enter, into an indemnification agreement with each of our directors and executive officers. The indemnificationagreements and our certificate of incorporation and bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law. For adescription of these indemnification agreements, see the section entitled “Executive Compensation — Limitations on Liability and Indemnification Matters.”Policies and Procedures for Related Party Transactions. All transactions between us and our officers, directors, principal stockholders and their affiliates are subjectto approval by the audit committee, or a similar committee consisting of entirely independent directors, according to the terms of our written Related-Person TransactionsPolicy and Code of Business Conduct and Ethics.Director IndependenceOur board of directors undertook a review of the independence of the directors and considered whether any director has a material relationship with us that couldcompromise his ability to exercise independent judgment in carrying out his responsibilities. As a result of this review, our board of directors determined that all of ourdirectors except for Mr. Browne, our President and Chief Executive Officer, representing nine of our ten directors, are “independent directors” as defined under NASDAQlisting rules and the independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.99Table of ContentsITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICESFees Paid to the Independent Registered Public Accounting FirmThe following table presents fees for professional audit services and other services rendered to our company by PricewaterhouseCoopers, or PwC, for the fiscal yearsended December 31, 2015 and 2014. 2015 2014Audit Fees (1)$906,482 $1,266,360 (1)Audit Fees consist of professional services rendered in connection with the audit of our Consolidated Financial Statements and review of our quarterlyConsolidated Financial Statements. Fees for fiscal 2014 also include fees associated with our IPO completed in February 2014, which included review of ourquarterly Consolidated Financial information included in our registration statement on Form S-1 filed with the SEC, as well as delivery of comfort letters, consentsand review of documents filed with the SEC. Fees for fiscal 2015 and 2014 also include fees associated with our follow on offerings completed in November 2015and June 2014, respectively, which included delivery of comfort letters, consents and review of documents filed with the SEC.Auditor IndependenceIn 2015, there were no other professional services provided by PwC that would have required the audit committee to consider their compatibility with maintaining theindependence of PwC.Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting FirmConsistent with requirements of the SEC and the Public Company Oversight Board, or PCAOB, regarding auditor independence, our audit committee is responsiblefor the appointment, compensation and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our audit committeehas established a policy for the pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. These servicesmay include audit services, audit-related services, tax services and other services.Before engagement of the independent registered public accounting firm for the next year’s audit, the independent registered public accounting firm submits adetailed description of services expected to be rendered during that year for each of the following categories of services to the audit committee for approval: •Audit services . Audit services include work performed for the audit of our financial statements and the review of financial statements included in ourquarterly reports, as well as work that is normally provided by the independent registered public accounting firm in connection with statutory and regulatoryfilings.•Audit-related services . Audit-related services are for assurance and related services that are reasonably related to the performance of the audit or review ofour financial statements and are not covered above under “audit services.”•Tax services . Tax services include all services performed by the independent registered public accounting firm’s tax personnel for tax compliance, tax adviceand tax planning.•Other services . Other services are those services not described in the other categories.The audit committee pre-approves particular services or categories of services on a case-by-case basis. The fees are budgeted, and the audit committee requires theindependent registered public accounting firm and management to report actual fees versus budgeted fees periodically throughout the year by category of service. Duringthe year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated inthe original pre-approval. In those instances, the services must be pre-approved by the audit committee before the independent registered public accounting firm is engaged.100Table of ContentsPART IV ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a) The following documents are filed as part of this Annual Report on this Form 10-K:(1) Financial Statements. The financial statements required by this item are set forth beginning at F-1 of this Annual Report on this Form 10-K and areincorporated herein by reference.(2) Financial Statement Schedules. See index to Consolidated Financial Statements on page F-1. All other schedules have been omitted because they are notrequired or are not applicable.(3) Exhibits. The documents listed in the Exhibit Index of this Form 10-K are incorporated by reference or are filed with this report, in each case as indicatedtherein (numbered in accordance with Item 601 of Regulation S-K).101Table of ContentsREVANCE THERAPEUTICS, INC.INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PageReport of Independent Registered Public Accounting FirmF-2Consolidated Financial Statements: Consolidated Balance SheetsF-3Consolidated Statements of Operations and Comprehensive LossF-4Consolidated Statements of Changes in Convertible Preferred Stock and of Stockholders’ Equity (Deficit)F-5Consolidated Statements of Cash FlowsF-12Notes to Consolidated Financial StatementsF-14F-1Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Stockholders ofRevance Therapeutics, Inc.:In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations and comprehensive loss, of changes in convertiblepreferred stock and stockholders’ equity (deficit) and of cash flows present fairly, in all material respects, the financial position of Revance Therapeutics, Inc. and itssubsidiary at December 31, 2015 and December 31, 2014 , and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2015 , in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements inaccordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonable basis for our opinion./s/ PricewaterhouseCoopers LLPSan Jose, CaliforniaMarch 4, 2016F-2Table of ContentsREVANCE THERAPEUTICS, INC.Consolidated Balance Sheets(In thousands, except share and per share amounts) As of December 31, 2015 2014ASSETSCURRENT ASSETS Cash and cash equivalents$201,615 $171,032Short-term investments50,688 —Restricted cash, current portion35 75Prepaid expenses and other current assets1,625 1,624Total current assets253,963 172,731Property and equipment, net19,708 19,274Long-term investments1,751 —Restricted cash, net of current portion400 435Other non-current assets— 29TOTAL ASSETS$275,822 $192,469LIABILITIES AND STOCKHOLDERS’ EQUITYCURRENT LIABILITIES Accounts payable$2,657 $3,149Accruals and other current liabilities6,245 4,145 Financing obligations, current portion3,135 307Notes payable, current portion and net of discount— 2,635Total current liabilities12,037 10,236Financing obligations, net of current portion5,346 598Derivative liabilities associated with Medicis settlement1,414 1,541Deferred rent3,773 3,725TOTAL LIABILITIES22,570 16,100Commitments and Contingencies (Note 11) Convertible preferred stock, par value $0.001 per share — 5,000,000 shares authorized both as of December 31, 2015 and2014; no shares issued and outstanding both as of December 31, 2015 and 2014— —STOCKHOLDERS’ EQUITY Common stock, par value $0.001 per share — 95,000,000 shares authorized both as of December 31, 2015 and 2014;28,288,464 and 23,774,465 shares issued and outstanding as of December 31, 2015 and 2014, respectively28 24Additional paid-in capital585,537 435,142Accumulated other comprehensive loss(40) —Accumulated deficit(332,273) (258,797)TOTAL STOCKHOLDERS’ EQUITY253,252 176,369TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$275,822 $192,469The accompanying notes are an integral part of these Consolidated Financial Statements.F-3Table of ContentsREVANCE THERAPEUTICS, INC.Consolidated Statements of Operations and Comprehensive Loss(In thousands, except share and per share amounts) Year Ended December 31, 2015 2014 2013Revenue$300 $383 $617Operating expenses: Research and development47,529 33,390 27,831General and administrative25,088 19,043 11,011Total operating expenses72,617 52,433 38,842Loss from operations(72,317) (52,050) (38,225)Interest income231 44 2Interest expense(1,190) (10,672) (15,164)Change in fair value of derivative liabilities associated with the convertible notes— 4,032 2,660Changes in fair value of derivative liabilities associated with Medicis settlement127 (320) 47Change in fair value of common stock warrant liability— (2,151) (621)Change in fair value of convertible preferred stock warrant liability— (210) (743)Loss on settlement of preferred stock warrant— (1,356) —Other expense, net(327) (234) (404)Net loss(73,476) (62,917) (52,448)Unrealized loss on available for sale securities(40) — —Comprehensive loss$(73,516) $(62,917) $(52,448)Net income (loss) attributable to common stockholders (Note 15): Basic$(73,476) $(62,917) $258Diluted$(73,476) $(62,917) $1,083Net income (loss) per share attributable to common stockholders: Basic$(3.02) $(3.24) $1.17Diluted$(3.02) $(3.24) $1.05Weighted-average number of shares used in computing net income (loss) per share attributable tocommon stockholders: Basic24,340,466 19,391,523 220,220Diluted24,340,466 19,391,523 1,029,150The accompanying notes are an integral part of these Consolidated Financial Statements.F-4REVANCE THERAPEUTICS, INC.Consolidated Statements of Changes in Convertible Preferred Stock and of Stockholders’ Equity (Deficit)(In thousands, except share and per share amounts) Convertible Preferred Stock Common Stock Additional Paid-In Capital OtherAccumulated Comprehensive Income (Loss) AccumulatedDeficit Total Stockholders’Equity (Deficit) Shares AmountShares Amount Balance — December 31, 20121,517,381 $95,433 204,024 $— $1,599 $— $(218,326) $(216,727)Stock-based compensation expense relatedto stock options— — — — 548 — — 548Conversion of Series A and B convertiblepreferred stock into Series E-1convertible preferred stock— (11,256) — — — — 11,256 11,256Conversion of Series C convertible preferredstock into Series E-2 convertiblepreferred stock— (39,000) — — — — 39,000 39,000Conversion of Series D convertiblepreferred stock into Series E-3convertible preferred stock607,476 (24,638) — — — — 24,638 24,638Conversion of 2011 Notes into Series E-4convertible preferred stock4,748,484 66,954 — — 32,008 — — 32,008Issuance of Series E-5 convertible preferredstock for cash at $22.50 per share inFebruary through May 2013, net ofissuance costs of $1321,810,441 36,375 — — — — — —Issuance of Series E-5 convertible preferredstock as a deemed dividend7,911 177 — — (177) — — (177)Issuance of common stock warrants inconnection with Series E-5 convertiblepreferred stock financing— — — — 4,272 — — 4,272Expiration of note payable fromstockholder, Series E-1(1,694) (63) — — 63 — — 63Exercise of stock options at $2.55 per share— — 4,284 — 11 — — 11Exercise of common stock warrants at $0.15per share— — 52,481 — 7 — — 7Net loss— — — — — — (52,448) (52,448)Balance — December 31, 20138,689,999 123,982 260,789 — 38,331 — (195,880) (157,549)Issuance of common stock relating toemployee stock purchase plan— — 25,339 — 349 — — 349Stock-based compensation expense relatedto stock options, restricted stockawards, and employee stock purchaseplan— — — — 6,513 — — 6,513Conversion of preferred stock to commonstock in connection with initial publicoffering(8,689,999) (123,982) 8,689,999 9 123,972 — — 123,981Conversion of preferred stock warrants tocommon stock warrants in connectionwith initial public offering— — — — 1,441 — — 1,441Issuance of common stock in connectionwith initial public offering, net ofunderwriting discounts, commissionsand issuance costs of $11,800— — 6,900,000 7 98,637 — — 98,644Issuance of common stock upon conversionof 2013 convertible notes in connectionwith initial public offering— — 1,637,846 2 26,204 — — 26,206Issuance of common stock upon net exerciseof common stock warrants and relatedextinguishment of warrant liability inconnection with initial public offering— — 1,158,443 1 6,489 — — 6,490Issuance of common stock in connectionwith the 2014 follow on offering, net ofunderwriting discounts, commissionsand issuance costs of $9,000— — 4,600,000 5 131,330 — — 131,335Issuance of common stock upon net exerciseof warrant— — 10,613 — — — — —Issuance of common stock upon exercise ofstock options— — 239,000 — 1,422 — — 1,422Issuance of restricted stock awards, net ofrepurchase— — 251,325 — — — — —Issuance of common stock warrants— — — — 379 — — 379Issuance of common stock at $15.45 pershare for services rendered— — 1,111 — 17 — — 17Termination of repurchase rights related tovesting of common stock issuedpursuant to early exercises— — — — 58 — — 58Net loss— — — — — — (62,917) (62,917)Balance — December 31, 2014— — 23,774,465 24 435,142 — (258,797) 176,369Issuance of common stock relating toemployee stock purchase plan— — 15,745 — 318 — — 318Stock-based compensation expense relatedto stock options, restricted stockawards, and employee stock purchaseplan— — — — 12,388 — — 12,388Issuance of common stock in connectionwith At-The-Market offering, net ofissuance costs— — 352,544 — 10,021 — — 10,021Issuance of common stock in connectionwith the 2015 follow-on offering, net ofissuance costs— — 3,737,500 4 126,226 — — 126,230Issuance of common stock upon net exerciseof warrants— — 68,993 — — — — —Issuance of common stock upon exercise ofstock options— — 205,735 — 2,435 — — 2,435Issuance of restricted stock awards, net ofrepurchase— — 169,562 — — — — —Vested restricted stock awards used to payfor taxes— — (36,080) — (993) — — (993)Unrealized loss on available for salesecurities— — — — — (40) — (40)Net loss— — — — — — (73,476) (73,476)Balance — December 31, 2015— $— 28,288,464 $28 $585,537 $(40) $(332,273) $253,252The accompanying notes are an integral part of these Consolidated Financial Statements.F-5REVANCE THERAPEUTICS, INC.Consolidated Statements of Cash Flows(In thousands) Year EndedDecember 31, 2015 2014 2013CASH FLOWS FROM OPERATING ACTIVITIES Net loss$(73,476) $(62,917) $(52,448)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation1,995 2,051 1,881Amortization of premium on investments601 — —Amortization of discount on debt and capital leases5 1,250 4,128Amortization of debt issuance cost39 203 217Change in fair value of derivative liabilities associated with convertible notes— (4,032) (2,660)Change in fair value of derivative liabilities associated with the Medicis settlement(127) 320 (47)Change in fair value of common stock warrant liability— 2,151 621Change in fair value of convertible preferred stock warrant liability— 210 (425)Extinguishment of warrant liability upon exercise of put option by warrant holder— 1,356 —Convertible preferred stock warrant modification remeasurement adjustment— — 1,168Loss on extinguishment of 2013 Notes— 8,331 —Stock-based compensation expense12,388 6,530 548Interest on convertible notes converted to convertible preferred stock— — 9,220Interest for 2013 Notes and Essex Notes upon issuance, non-cash— 271 273Capitalized interest— (972) (453)Fair value of common stock warrants issued— 379 —Effective interest on financing obligations344 28 —Loss on disposal of fixed assets38 — —Changes in operating assets and liabilities: Prepaid expenses and other current assets(192) (999) 422Other non-current assets29 (1,621) (2,770)Accounts payable(692) (3,399) 3,193Accruals and other current liabilities3,179 2,311 (3,832)Payments against Medicis liabilities— (7,073) (6,927)Deferred rent200 549 133Net cash used in operating activities(55,669) (55,073) (47,758)CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment(3,328) (6,975) (6,477)Proceeds from maturities of investments1,000 — —Purchases of investments(54,087) — —Change in restricted cash75 75 75Net cash used in investing activities(56,340) (6,900) (6,402)CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock, net of deferred 2015 follow-on offering costs126,230 — —Proceeds from issuance of common stock, net of deferred at-the-market offering costs10,021 — —Proceeds from failed sale-leaseback financings9,831 — —Proceeds from the exercise of stock options, employee stock purchase plan, and common stock warrants2,753 1,771 18Net settlement of restricted stock awards to settle employee taxes(993) — —Principal payments made on capital leases and financing obligations(2,598) (228) (982)Principal payments made on notes payable(2,652) (12,316) (7,594)Proceeds from issuance of common stock, net of deferred 2014 follow-on public offering costs— 131,880 —Proceeds from issuance of common stock, net of deferred initial public offering costs— 102,672 —Proceeds from issuance of convertible notes and notes payable— 6,750 21,903Payments to settle warrants— (1,438) —Proceeds from issuance of convertible preferred stock, net— — 40,646Net cash provided by financing activities142,592 229,091 53,991NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS30,583 167,118 (169)CASH AND CASH EQUIVALENTS — Beginning of period171,032 3,914 4,083CASH AND CASH EQUIVALENTS — End of period201,615 171,032 3,914SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest802 1,182 1,590SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: Conversion of Series E-1, E-2, E-3, E-4 and E-5 preferred stock into common stock— 123,982 —Conversion of 2013 Notes into common stock— 26,206 —Issuance of common stock upon net exercise of common stock warrants in connection with IPO— 6,490 —Fair value in excess of debt host for derivative liabilities associated with convertible notes— 1,050 5,750Deferred initial public offering costs— 4,028 2,490Deferred follow-on public offering costs— 546 —Conversion of preferred stock warrants to common stock warrants— 1,441 —Conversion of Essex Notes into financing obligations— 1,095 —Termination of stock option repurchase right— 58 —Capital contribution on the extinguishment of the prior convertible preferred stock— — 74,894Capital contribution on the extinguishment of the 2011 Notes— — 32,008Deemed dividend on issuance of Series E-5 convertible preferred stock— — 177Issuance of common stock warrants in connection with Series E-5 convertible preferred stock financing— — 4,272Issuance of common stock warrants in connection with the 2013 Notes— 981 2,737Property and equipment purchases included in accounts payable and accruals and other current liabilities487 1,348 2,285Issuance of convertible preferred stock warrants— 80 139Fair value of common stock warrants issued— 379 —The accompanying notes are an integral part of these Consolidated Financial Statements.F-6Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial StatementsDecember 31, 2015 and 20141. The Company and Basis of PresentationRevance Therapeutics, Inc., or the Company, was incorporated in Delaware on August 10, 1999 under the name Essentia Biosystems, Inc. The Company commencedoperations in June 2002 and on April 19, 2005 , changed its name to Revance Therapeutics, Inc. The Company is a clinical-stage biotechnology company focused on thedevelopment, manufacturing and commercialization of novel botulinum toxin products for multiple aesthetic and therapeutic indications. The Company is leveraging itsproprietary portfolio of botulinum toxin type A compounds, combined with its patented TransMTS® peptide delivery system to address unmet needs in large and growingneurotoxin markets. The Company's proprietary TransMTS technology enables delivery of botulinum toxin type A through two investigational drug product candidates,DaxibotulinumtoxinA Topical Gel (RT001), or RT001 topical, and DaxibotulinumtoxinA for Injection (RT002), or RT002 injectable. The Company is pursuing clinicaldevelopment for RT001 topical and RT002 injectable in a broad spectrum of aesthetic and therapeutic indications. The Company holds worldwide rights for all indicationsof RT001 topical, RT002 injectable and our TransMTS technology platform.Since commencing operations in 2002, the Company has devoted substantially all of its efforts to identifying and developing product candidates for the aesthetics andtherapeutic pharmaceutical markets, recruiting personnel and raising capital. The Company has devoted predominantly all of its resources to preclinical, clinical, andmanufacturing development of RT001 topical and RT002 injectable. The Company has never been profitable and has not yet commenced commercial operations.Since the Company's inception, the Company has incurred losses and negative cash flows from operations. The Company has not generated significant revenue fromproduct sales to date and will continue to incur significant research and development and other expenses related to its ongoing operations. The Company has recorded netlosses of $73.5 million , $62.9 million and $52.4 million for the years ended December 31, 2015 , 2014 and 2013 . As of December 31, 2015 , the Company had a workingcapital surplus of $241.9 million and an accumulated deficit of $332.3 million . The Company has funded its operations primarily through the sale and issuance of commonstock, convertible preferred stock, notes payable, and convertible notes. As of December 31, 2015 , the Company had capital resources consisting of cash, cash equivalents,and investments of $254.1 million . The Company believes that its existing cash, cash equivalents, and investments will allow the Company to fund its operating planthrough at least the next 12 months .Initial Public OfferingIn February 2014, the Company completed its initial public offering, or IPO, pursuant to which the Company issued 6,900,000 shares of common stock at $16.00 pershare, including the exercise of the underwriters’ over-allotment option to purchase 900,000 additional shares of common stock, and received net proceeds of $98.6 million ,after underwriting discounts, commissions, and other offering expenses. In addition, in connection with the completion of the Company’s IPO, all convertible preferredstock converted into common stock.Follow-On Public OfferingsIn June 2014, the Company completed a follow-on public offering, or the 2014 follow-on offering, pursuant to which the Company issued 4,600,000 shares ofcommon stock at $30.50 per share, including the exercise of the underwriters’ over-allotment option to purchase 600,000 additional shares of common stock, and receivednet proceeds of $131.3 million , after underwriting discounts, commissions and other offering expenses.In November 2015, the Company completed a follow-on public offering, or the 2015 follow-on offering, pursuant to which the Company issued 3,737,500 shares ofcommon stock at $36.00 per share, including the exercise of the underwriters’ over-allotment option to purchase 487,500 additional shares of common stock, for netproceeds of $126.2 million , after underwriting discounts, commissions and other offering expenses.At-The-Market OfferingIn March 2015, the Company entered into an At-The-Market Issuance Sales Agreement, or the ATM agreement, with Cowen and Company, LLC, or Cowen, underwhich the Company may offer and sell our common stock having aggregate proceeds of up to $50.0 million from time to time through Cowen as our sales agent. Sales ofcommon stock through CowenF-7Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)will be made by means of ordinary brokers’ transactions on the NASDAQ Global Market or otherwise at market prices prevailing at the time of sale, in block transactions,or as otherwise agreed upon by the Company and Cowen. Cowen will use commercially reasonable efforts to sell the common stock from time to time, based uponinstructions from the Company (including any price, time or size limits or other customary parameters or conditions we may impose). The Company agreed to pay Cowen acommission of up to 3.0% of the gross sales proceeds of any common stock sold through Cowen under the ATM agreement. During the third quarter 2015, the Companysold 352,544 shares of common stock under the ATM agreement at a weighted average price of $30.76 per share resulting in net proceeds of approximately $10.0 million ,after underwriting discounts, commissions, and other offering expenses. As of December 31, 2015 , common stock for aggregate gross proceeds of $39.2 million remainedavailable under this facility, subject to certain conditions as specified in the ATM agreement.Reverse Stock SplitIn January 2014, the Company’s Board of Directors and stockholders approved an amended and restated certificate of incorporation effecting a 1-for- 15 reverse stocksplit of the Company’s issued and outstanding shares of common stock and convertible preferred stock that was effective on February 3, 2014. The par value of the commonand convertible preferred stock was not adjusted as a result of the reverse stock split. All issued and outstanding share and per share amounts included in the accompanyingfinancial statements have been retroactively adjusted to reflect this reverse stock split.F-8Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)2. Summary of Significant Accounting PoliciesBasis of PresentationThe Consolidated Financial Statements of the Company include the Company’s accounts and those of its wholly-owned subsidiary, Revance Therapeutics Limited,and have been prepared in conformity with accounting principles generally accepted in the United States of America, or US GAAP. All significant intercompanytransactions and balances have been eliminated during consolidation.Use of EstimatesThe preparation of Consolidated Financial Statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amountsreported in the Consolidated Financial Statements and accompanying notes. Such management estimates include the fair value of common stock prior to the IPO, accruals,stock-based compensation, fair value of convertible preferred stock and warrants, fair value of derivatives liability, and the valuation of deferred tax assets. The Companybases its estimates on historical experience and also on assumptions that it believes are reasonable, however, actual results could significantly differ from those estimates.Risks and UncertaintiesThe product candidates developed by the Company require approvals from the U.S. Food and Drug Administration (FDA) or foreign regulatory agencies prior tocommercial sales. There can be no assurance that the Company’s current and future product candidates will meet desired efficacy and safety requirements to obtain thenecessary approvals. If the Company is denied approval or approval is delayed, it may have a material adverse impact on the Company’s business and its ConsolidatedFinancial Statements.The Company is subject to risks common to companies in the development stage including, but not limited to, dependency on the clinical and commercial success ofits product candidates, ability to obtain regulatory approval of its product candidates, the need for substantial additional financing to achieve its goals, uncertainty of boardadoption of its approved products, if any, by physicians and consumers, significant competition and untested manufacturing capabilities.Concentration of Credit RiskFinancial instruments that potentially subject the Company to a concentration of credit risk consist of short and long-term investments. Under the Company'sInvestment Policy, the Company limits its credit exposure by investing in highly liquid funds and debt obligations of the U.S. government and its agencies with high creditquality. The Company’s cash, cash equivalents, and investments are held in the United States of America. Such deposits may, at times, exceed federally insured limits. TheCompany has not experienced any losses on its deposits of cash, cash equivalents, and investments. Cash and Cash EquivalentsThe Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cashand cash equivalents include deposit, money market funds, and debt securities.Restricted CashDeposits of $435,000 and $510,000 were restricted from withdrawal as of December 31, 2015 and 2014 . The restriction is related to securing the Company’s facilitylease and expires in 2025 in accordance with the operating lease agreement, as amended. The restrictions on these balances are being released at a rate of $75,000 per yearuntil the balance is $400,000 and then remain at that limit until the end of the lease. These balances are included in restricted cash on the accompanying ConsolidatedBalance Sheets.InvestmentsShort-term investments generally consist of securities with original maturities greater than three months and remaining maturities of less than one year, while long-terminvestments generally consist of securities with remaining maturities greater than one year. The Company determines the appropriate classification of its investments at thetime of purchase and reevaluatesF-9Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)such determination at each balance sheet date. All of its investments are classified as available-for-sale and carried at fair value, with the change in unrealized gains andlosses reported as a separate component of other comprehensive income (loss) on the Consolidated Statements of Operations and Comprehensive Loss and accumulated as aseparate component of stockholders' equity on the Consolidated Balance Sheets. Interest income, net includes interest, dividends, amortization of purchase premiums anddiscounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of investments, if any. The cost of securities sold is based onthe specific-identification method. The Company monitors its investment portfolio for potential impairment on a quarterly basis. If the carrying amount of an investment indebt securities exceeds its fair value and the decline in value is determined to be other-than-temporary, the carrying amount of the security is reduced to fair value and a lossis recognized in operating results for the amount of such decline. In order to determine whether a decline in value is other-than-temporary, the Company evaluates, amongother factors, the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity andduration of the unrealized losses, and its intent and ability to hold the security to maturity or forecasted recovery. The Company mitigates its credit risk by investing inmoney market funds and U.S. government agency obligations which limits the amount of investment exposure as to credit quality and maturity.Fair Value of Financial InstrumentsThe Company uses fair value measurements to record fair value adjustments to certain financial and non-financial assets and liabilities to determine fair valuedisclosures. The accounting standards define fair value, establish a framework for measuring fair value, and require disclosures about fair value measurements. Fair value isdefined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the principal or most advantageous market in which theCompany would transact are considered along with assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transferrestrictions, and risk of nonperformance. The accounting standard for fair value establishes a fair value hierarchy based on three levels of inputs, the first two of which areconsidered observable and the last unobservable, that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs whenmeasuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair valuemeasurement.The three levels of inputs that may be used to measure fair value are as follows: Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that areobservable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Valuations based on unobservable inputs to the valuation methodology and including data about assumptions marketparticipants would use in pricing the asset or liability based on the best information available under the circumstances.Property and Equipment, NetProperty and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives ofthe assets. Computer equipment, lab equipment, furniture and fixtures, and manufacturing equipment is depreciated over 3 , 5 , 5 , and 7 years, respectively. Repairs andmaintenance that do not extend the life or improve an asset are expensed in the period incurred. Leasehold improvements are amortized over the lesser of 15 years years or the term of the lease. Repairs and maintenance are charged to operations as incurred.When assets are retired or otherwise disposed of, the costs and accumulated depreciation are removed from the Consolidated Balance Sheets and any resulting gain or lossis reflected in the Consolidated Statements of Operations and Comprehensive Loss in the period realized.F-10Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)Impairment of Long-Lived AssetsThe Company evaluates its long-lived assets for indications of possible impairment whenever events or changes in circumstances indicate that the carrying amount ofan asset may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the future undiscounted cash flows, attributable to these assets.Should impairment exist, the impairment would be measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flowsarising from those assets. There have been no such impairments of long-lived assets as of and for the years ended December 31, 2015 , 2014 , and 2013 .Clinical Trial AccrualsClinical trial costs are charged to research and development expense as incurred. The Company accrues for expenses resulting from obligations under contracts withclinical research organizations (CROs), consultants, and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts aresubject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided tothe Company under such contracts. The Company’s objective is to reflect the appropriate expense in the Consolidated Financial Statements by matching the appropriateexpenses with the period in which services and efforts are expended. In the event advance payments are made to a CRO, the payments will be recorded as a prepaid expensewhich will be amortized as services are rendered.The CRO contracts generally include pass-through fees including, but not limited to, regulatory expenses, investigator fees, travel costs and other miscellaneous costs,including shipping and printing fees. The Company determines accrual estimates through reports from and discussion with clinical personnel and outside services providersas to the progress or state of completion of trials, or the services completed. The Company estimates accrued expenses as of each balance sheet date in the ConsolidatedFinancial Statements based on the facts and circumstances known to the Company at that time. The Company’s clinical trial accrual is dependent, in part, upon the receiptof timely and accurate reporting from the CROs and other third-party vendors. RevenueWe recognize revenue when the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred; the price is fixed ordeterminable; and collectability is reasonably assured. During the years ended December 31, 2015, 2014, and 2013, we received revenue through various sources, such aslicense and royalty agreements, which may include milestone payments.Revenue from license agreements is recognized when an arrangement is entered into and if we have substantially completed our obligations under the terms of thearrangement and our remaining involvement is inconsequential and perfunctory. If we have significant continuing involvement under such an arrangement, license fees aredeferred and recognized over the estimated performance period. License fee payments received in excess of amounts earned are classified as deferred revenue until earned.Revenue from royalty payments is contingent on sales activities by our licensees. As a result, we recognize royalty revenue when all revenue recognition criteria havebeen satisfied.We recognize revenue for milestone payments upon the achievement of specified milestones if (1) the milestone is substantive in nature, and the achievement of themilestone was not reasonably assured at the inception of the agreement, (2) the achievement relates to past performance, and (3) the fees are nonrefundable. Milestonepayments received in excess of amounts earned are classified as deferred revenue until earned.Research and Development ExpendituresResearch and development costs are charged to operations as incurred. Research and development costs include, but are not limited to, payroll and personnelexpenses, clinical trial supplies, fees for clinical trial services, manufacturing costs, consulting costs and allocated overhead, including rent, equipment, depreciation andutilities.Income TaxesThe Company accounts for income taxes under the asset and liability method. The Company estimates actual current tax exposure together with assessing temporarydifferences resulting from differences in accounting for reporting purposes and taxF-11Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)purposes for certain items, such as accruals and allowances not currently deductible for tax purposes. These temporary differences result in deferred tax assets andliabilities, which are included in the Company’s Consolidated Balance Sheets. In general, deferred tax assets represent future tax benefits to be received when certainexpenses previously recognized in the Company’s Consolidated Statements of Operations and comprehensive loss become deductible expenses under applicable income taxlaws or when net operating loss or credit carryforwards are utilized. Accordingly, realization of the Company’s deferred tax assets is dependent on future taxable incomeagainst which these deductions, losses and credits can be utilized.The Company must assess the likelihood that the Company’s deferred tax assets will be recovered from future taxable income, and to the extent the Companybelieves that recovery is not likely, the Company establishes a valuation allowance. Based on the available evidence, the Company is unable, at this time, to support thedetermination that it is more likely than not that its deferred tax assets will be utilized in the future. Accordingly, the Company recorded a full valuation allowance as ofDecember 31, 2015 and 2014 . The Company intends to maintain valuation allowances until sufficient evidence exists to support its reversal.Stock-Based CompensationThe Company has equity incentive plans under which various types of equity-based awards including, but not limited to, incentive stock options, non-qualified stockoptions, and restricted stock awards, may be granted to employees, non-employee directors, and non-employee consultants. The Company also has an inducement planunder which various types of equity-based awards, including non-qualified stock options and restricted stock awards, may be granted to new employees.For stock options granted to employees and directors, the Company recognizes compensation expense for all stock-based awards based on the estimated grant-datefair values, net of an estimated forfeiture rate. For restricted stock awards to employees, the fair value is based on the closing price of the Company's common stock on thedate of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The fair value ofstock options is determined using the Black-Scholes option pricing model. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures and willcontinue to evaluate the adequacy of the forfeiture rate assumption based on actual forfeitures, analysis of employee turnover, and other related factors.Stock-based compensation expense related to stock options granted to non-employees is recognized based on the fair value of the stock options, determined using theBlack-Scholes option pricing model, as they are earned. The awards vest over the time period the Company expects to receive services from the non-employee.WarrantsThe Company has issued freestanding warrants to purchase shares of common stock and convertible preferred stock in connection with certain debt and leasetransactions. The warrants are recorded at fair value using the Black-Scholes option pricing model. Common Stock WarrantsPrior to completion of the IPO, the Company accounted for warrants to purchase shares of its common stock as liabilities at fair value because these warrants mayhave obligated the Company to transfer assets to the holders at a future date under certain circumstances, such as change of control. The Company remeasured thesewarrants to current fair value at each balance sheet date, with changes in fair value recognized as a change in fair value of the warrant liability on the ConsolidatedStatements of Operations and Comprehensive Loss. Upon completion of the IPO, these warrant liabilities were remeasured to fair value and settled in conjunction with acashless net exercise of these warrants. Common stock warrants classified as equity at inception are recorded to additional paid-in capital at fair value upon issuance.Convertible Preferred Stock WarrantsThe Company accounted for previously outstanding warrants to purchase shares of its convertible preferred stock that are contingently redeemable as liabilities attheir estimated fair value because these warrants obligated the Company to transfer assets to the holders at a future date under certain circumstances, such as a deemedliquidation event. The warrants were subject to remeasurement to fair value at each balance sheet date, with changes in fair value recognized as a change in fair value ofconvertible preferred stock warrant liability on the Consolidated Statements of Operations and Comprehensive Loss. UponF-12Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)completion of the IPO, the convertible preferred stock warrants converted into equity-classified warrants to purchase shares of common stock.Derivative LiabilitiesThe Company bifurcated and separately accounted for derivative instruments related to redemption and conversion features embedded within previously outstandingconvertible notes and other derivative instruments related to payment provisions underlying the Medicis settlement. These derivatives are accounted for as liabilities, whichwill be remeasured to fair value as of each balance sheet date, with changes in fair value recognized in the Consolidated Statements of Operations and Comprehensive Loss.The derivative liabilities associated with the 2013 Convertible Notes are no longer outstanding due to the conversion of the related convertible notes upon the IPO inFebruary 2014. The Company will continue to record adjustments to the fair value of the derivative liabilities associated with the Medicis settlement until the remainingsettlement payment has been paid.Comprehensive LossComprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. During the yearended December 31, 2015 , the Company had an unrealized loss for investments, which qualified as other comprehensive loss and, therefore have been reflected in theStatements of Operations and Comprehensive Loss. There was no comprehensive loss for the years ended December 31, 2014 and 2013.Net Income (Loss) per Share Attributable to Common StockholdersThe Company calculated its basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required forcompanies with participating securities prior to the IPO. Under the two-class method, the Company determines whether it has net income attributable to commonstockholders, which includes the results of operations, capital contributions and deemed dividends less current period convertible preferred stock non-cumulative dividends.If it is determined that the Company does have net income attributable to common stockholders during a period, the related undistributed earnings are then allocatedbetween common stock and the convertible preferred stock based on the weighted average number of shares outstanding during the period to determine the numerator forthe basic net income per share attributable to common stockholders. In computing diluted net income attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities to determine the numerator for the diluted net income per share attributable to common stockholders. TheCompany’s basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) by the weighted average number of sharesof common stock outstanding for the period, which includes vested restricted stock awards. The diluted net income (loss) per share attributable to common stockholders iscomputed by giving effect to all potential dilutive common stock equivalents outstanding for the period. The diluted net income (loss) per share attributable to commonstockholders also includes vested restricted stock awards and, if the effect is not anti-dilutive, unvested restricted stock awards. For purposes of this calculation, options topurchase common stock, unvested restricted stock, and common stock warrants are considered common stock equivalents.Interest ExpenseInterest expense, includes cash and non-cash components with the non-cash components consisting of (i) interest recognized from the amortization of debt issuancecosts, which were capitalized on the Consolidated Balance Sheets, that are generally derived from cash payments related to the issuance of convertible notes and notespayable, (ii) interest recognized from the amortization of debt discounts, which were capitalized on the Consolidated Balance Sheets, derived from the issuance of warrantsand derivatives issued in conjunction with convertible notes and notes payable, (iii) interest recognized on the 2011 convertible notes, or 2011 Notes, which was not paidbut instead converted into shares of convertible preferred stock, (iv) interest recognized on the 2013 Notes, which was not paid but instead converted into shares of commonstock, (v) interest capitalized for assets constructed for use in operations, (vi) interest related to the extinguishment of debt, which is classified as a gain or loss on debtextinguishments, and (vii) effective interest recognized on the financing obligation. The capitalized amounts related to the debt issuance costs and debt discounts aregenerally amortized to interest expense over the term of the related debt instruments.F-13Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)Recent Accounting PronouncementsOn February 25. 2016, the FASB issued Accounting Standards Update (ASU) 2016-02 Leases (Topic 842) , which requires an entity to recognize assets and liabilitiesarising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures to help investors and other financialstatement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements.On January 5, 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets andFinancial Liabilities , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The updated standard is effectivefor fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating theimpact that the standard will have on its Consolidated Financial Statements.On November 20, 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes , which simplifies thepresentation of deferred income taxes by requiring deferred tax assets and liabilities to be classified as noncurrent on the balance sheet. The updated standard is effective forfiscal years, and interim periods within those years, beginning after December 15, 2016 with early adoption permitted. We early adopted this standard prospectively. Sincethe Company has a full valuation allowance, there was no impact on our previously reported Consolidated Balance Sheets.In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) , which will require management toassess an entity’s ability to continue as a going concern at each annual and interim period. Related footnote disclosures will be required if conditions give rise to substantialdoubt about an entity’s ability to continue as a going concern within one year of the report issuance date. If conditions do not give rise to substantial doubt, no disclosureswill be required specific to going concern uncertainties. The guidance defines substantial doubt using a likelihood threshold of “probable” similar to the current use of thatterm in U.S. GAAP for loss contingencies and provides example indicators. The guidance is effective for reporting periods ending after December 15, 2016, and earlyadoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Company’s financial statements.F-14Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)3. Revenue and License AgreementsIn June 2013, the Company entered into an exclusive technology evaluation agreement with the Procter & Gamble Company to co-develop and explore applicationsof the TransMTS ® delivery technology in over-the-counter cosmetic compounds. The Company did not recognized license revenue during the year ended December 31,2015 in connection with this agreement. The Company received an upfront payment in the amount of $0.3 million , which was initially recorded as deferred revenue andwas recognized over the estimated performance period of 9 months. The Company estimated the performance period as the remaining life of the underlying patent at theinception of the license agreement, which was periodically reevaluated. The Company recognized total license revenue of $0.1 million and $0.2 million during the yearsended December 31, 2014 and 2013, respectively.In August 2011, the Company entered into an asset purchase and royalty agreement for the sale of the Relastin product line for $0.05 million and royalties on futuresales of Relastin. Accordingly, under the Relastin asset purchase agreement, the Company recognized royalty revenue of $0.3 million during each of the years endedDecember 31, 2015 , 2014 , and 2013 and $0.2 million in milestone revenue in the year ended December 31, 2013 for achievement of a one-time milestone. On April 23,2015, the Company received notice from Valeant terminating the royalty agreement effective as of July 23, 2015; however, as of December 31, 2015, reversion of theRelastin intellectual property rights had not been completed and the Company is entitled to the minimum royalty payment until such rights are reverted back to us.In February 2007, the Company entered into a license and service agreement and a manufacturing and supply agreement with List Biological Laboratories, Inc. (ListLaboratories), a developer of botulinum toxin. The agreement, as amended in April 2009, included certain milestone payments for the preparation of botulinum toxin andthe development of the toxin manufacturing process as well as royalties from future sales of botulinum toxin. The Company expensed research and development costsassociated with manufacturing for RT001 topical of $2.0 million during the year ended December 31, 2013. No costs associated with this agreement were recorded duringthe years ended December 31, 2015 and 2014.F-15Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)4. Medicis SettlementIn July 2009, the Company and Medicis Pharmaceutical Corporation, or Medicis, entered into a license agreement granting Medicis worldwide aesthetic anddermatological rights to the Company’s investigational, injectable botulinum toxin type A product candidate. In October 2012, the Company entered into a settlement andtermination agreement with Medicis. The terms of the settlement provided for the reacquisition of the rights related to all territories of RT001 topical and RT002 injectablefrom Medicis and for consideration payable by the Company to Medicis of up to $25.0 million , comprised of (i) an upfront payment of $7.0 million , which was paid in2012, (ii) a Proceeds Sharing Arrangement Payment of $14.0 million due upon specified capital raising achievements by the Company, of which $6.9 million was paid in2013 and the remaining $7.1 million was paid in 2014, and (iii) $4.0 million to be paid upon the achievement of regulatory approval for RT001 topical or RT002 injectableby the Company, or Product Approval Payment. Medicis was subsequently acquired by Valeant Pharmaceuticals International, Inc. in December 2012.The Company determined that the settlement provisions related to the Proceeds Sharing Arrangement Payment in (ii) above and Product Approval Payment in (iii)above were derivative instruments that require fair value accounting as a liability and periodic fair value remeasurements until settled.As of December 31, 2013, the Proceeds Sharing Arrangement Payment derivative was remeasured to fair value. The fair value of the Proceeds Sharing ArrangementPayment derivative as of December 31, 2013 of $6.7 million was determined using an option pricing model with the following assumption: expected term of 0.1 - 0.5 years, risk-free rate of 0.01% - 0.10% and volatility of 37.00% - 47.50% . Upon the completion of our IPO, we paid $7.1 million in settlement of our remaining obligationfor the Proceeds Sharing Arrangement Payment. At the settlement date, the derivative liability was remeasured to the fair value of the obligation due, or $7.1 million , andthe Company recorded $0.3 million to remeasure the fair value of the derivative for the remaining obligation through the date of settlement, or February 13, 2014.The fair value of the Product Approval Payment derivative as of December 31, 2014 in the amount of $1.5 million was determined by updating the estimate of thetiming and probability of the related approval and a discount factor assuming a term of 3.5 years, a risk-free rate of 1.2% and a credit risk adjustment of 6.5% . As ofDecember 31, 2015 , the Company determined the fair value of its liability for the Product Approval Payment was $1.4 million , which was measured by assuming a term of3.5 years, a risk-free rate of 1.4% and a credit risk adjustment of 9.0% . The Company’s assumption for the expected term is based on an expected Biologics LicenseApplication, or BLA, approval in mid-2019. The Company did not make any payments under the Product Approval Payment during the year ended December 31, 2015 .As a result of the fair value measurements during the years ended December 31, 2015 , 2014 , and 2013 , the Company recognized an aggregate gain of $0.1 million ,an aggregate loss $0.3 million , and an aggregate gain of $0.05 million , respectively.F-16Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)5. Cash Equivalents and InvestmentsThe Company's cash equivalents and investments consist of money market funds and U.S. government agency obligations, which are classified as available-for-salesecurities.The following table is a summary of amortized cost, unrealized gain and loss, and fair value (in thousands): December 31, 2015 December 31, 2014 Cost Gains Losses Fair Value Cost Gains Losses Fair ValueMoney market funds$145,747 $— $— $145,747 $166,038 $— $— $166,038U.S. government agencyobligations52,479 — (40) 52,439 — — — —Total cash equivalents andavailable-for-sale securities$198,226 $— $(40) $198,186 $166,038 $— $— $166,038 Classified as: Cash equivalents $145,747 $166,038Short-term investments 50,688 —Long-term investments 1,751 —Total cash equivalents andavailable-for-sale securities $198,186 $166,038There have been no significant realized gains or losses on available-for-sale securities for the periods presented. No significant available-for-sale securities held as ofDecember 31, 2015 have been in a continuous unrealized loss position for more than 12 months. As of December 31, 2015 , unrealized losses on available-for-saleinvestments are not attributed to credit risk and are considered to be temporary. The Company believes that it is more-likely-than-not that investments in an unrealized lossposition will be held until maturity or the cost basis of the investment will be recovered. The Company believes it has no other-than-temporary impairments on its securitiesas it does not intend to sell these securities and believes it is not more likely than not that it will be required to sell these securities before the recovery of their amortizedcost basis. To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in fair value.As of December 31, 2015 , the remaining contractual maturities of available-for-sale securities were less than two years. We had no available-for-sale securities as ofDecember 31, 2014.The following table classifies our marketable securities by contractual maturities (in thousands): December 31, 2015 2014Due within one year$50,688 $—Due between one and two years1,751 —Total$52,439 $—F-17Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)6. Fair Value MeasurementsThe Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. These liabilities, consisting of derivativeliabilities associated with the Medicis settlement, are considered Level 3 instruments, while the assets, consisting of money market funds and U.S. government agencyobligations, are considered Level 1 and Level 2 instruments, respectively. The fair value of these instruments was as follows (in thousands): As of December 31, 2015 Fair Value Level 1 Level 2 Level 3Assets Money market funds$145,747 $145,747 $— $—U.S. government agency obligations52,439 — 52,439 $—Total assets measured at fair value$198,186 $145,747 $52,439 $— Liabilities Derivative liabilities associated with the Medicis settlement$1,414 $— $— $1,414Total liabilities measured at fair value$1,414 $— $— $1,414 As of December 31, 2014 Fair Value Level 1 Level 2 Level 3Assets Money market funds$166,038 $166,038 $— $—Total assets measured at fair value$166,038 $166,038 $— $— Liabilities Derivative liabilities associated with the Medicis settlement$1,541 $— $— $1,541Total liabilities measured at fair value$1,541 $— $— $1,541 The Company did not transfer any assets or liabilities measured at fair value on a recurring basis to or from Level 1 and Level 2 during the years ended December 31,2015 and 2014 .F-18Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments as follows (in thousands): DerivativeLiabilityAssociated withthe MedicisSettlementFair value as of December 31, 2014 1,541Change in fair value (127)Fair value as of December 31, 2015 $1,414 Level 3 instruments consist of the Company’s derivative liabilities related to convertible notes, derivative liabilities related to the Medicis settlement, common stockwarrant liabilities, and convertible preferred stock warrant liabilities.The fair value of the derivative liabilities associated with the convertible notes was measured using the Monte Carlo valuation methodology (Note 9). Inputs used todetermine estimated fair value of these derivative instruments include the probability estimates of potential settlement scenarios for the convertible notes, a present valuediscount rate and an estimate of the expected timing of settlement. The significant unobservable inputs used in the fair value measurement of the derivatives associated withthe convertible notes are the scenario probabilities and the discount rate estimated at the valuation date. Generally, increases or decreases in the discount rate would result ina directionally opposite impact to the fair value measurement of this derivative instrument. Also, changes in the probability scenarios would have had varying impactsdepending on the weighting of each specific scenario. As discussed further in Note 9, heavier weighting towards a change in control, a private investment in public equitytransaction or IPO would result in an increase in fair value of this derivative instrument. The fair value upon the IPO took into account a 100% weighting towards the IPOscenario.The fair value of the derivative liability resulting from the Medicis litigation settlement, specifically the previously outstanding liability for the derivative related tothe Proceeds Sharing Arrangement Payment (Note 4), was measured using an option pricing model (Note 4). Inputs used to determine estimated fair value of this derivativeinclude the equity value of the Company, expected timing of the respective settlement payments, a risk-free interest rate and the expected volatility. The significantunobservable inputs used in the fair value measurement of the Proceeds Sharing Arrangement Payment derivative are the equity value of the Company and the expectedtiming of the payments at the valuation date. Generally, increases or decreases in these unobservable inputs would result in a directionally similar impact to the fair valuemeasurement of this derivative instrument. The Company settled the remaining obligation under the Proceeds Sharing Arrangement upon the IPO, and remeasured theliability to the value of the remaining Proceeds Sharing Arrangement Payment of $7.1 million .The fair value of the remaining derivative liability resulting from the Medicis litigation settlement, specifically the derivative related to the Product Approval Payment(Note 4), was determined by estimating the timing and probability of the related regulatory approval and multiplying the payment amount by this probability percentage anda discount factor based primarily on the estimated timing of the payment and a credit risk adjustment (Note 4). The significant unobservable inputs used in the fair valuemeasurement of the Product Approval Payment derivative are the expected timing and probability of the payments at the valuation date and the credit risk adjustment.The fair values of the outstanding common stock warrants and previously outstanding convertible preferred stock warrants were measured using the Black-Scholesoption-pricing model (Note 16). Inputs used to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at thevaluation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significantunobservable inputs used in the fair value measurement of the convertible preferred stock warrant liability are the fair value of the underlying stock at the valuation date andthe estimated term of the warrants.F-19Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)7. Balance Sheet ComponentsProperty and Equipment, netProperty and equipment, net consists of the following (in thousands): As of December 31, 2015 2014Research equipment$12,053 $10,914Computer equipment879 477Furniture and fixtures604 534Leasehold improvements4,164 3,833Construction in progress13,480 13,422Total property and equipment31,180 29,180Less: accumulated depreciation and amortization(11,472) (9,906)Property and equipment, net$19,708 $19,274Depreciation expense was $2.0 million , $2.1 million , and $1.9 million for the years ended December 31, 2015 , 2014 and 2013 , respectively.As of December 31, 2015 , the Company had obligations to make future payments to certain vendors that become due and payable during the construction of itsmanufacturing facilities in Newark, California. The arrangement was accounted for as construction-in-progress and the outstanding obligations as of December 31, 2015and 2014 were $0.03 million and $0.5 million , respectively. The Company capitalized interest costs in the amount of $1.0 million and $0.5 million within construction-in-progress during the years ended December 31, 2014 and 2013, respectively. The Company did not capitalize interest costs during the year ended December 31, 2015.Prepaid Expenses and Other Current AssetsPrepaid expenses and other current assets consist of the following (in thousands): As of December 31, 2015 2014Prepaid expenses$1,200 $1,085Accounts receivable and other receivables158 300Other current assets267 239Total prepaid expenses and other current assets$1,625 $1,624 Accruals and Other Current LiabilitiesAccruals and other current liabilities consist of the following (in thousands):F-20Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued) As of December 31, 2015 2014Accrued compensation$3,282 $2,088Accrued professional service fees471 577Accrued manufacturing and quality control costs207 361Accrued clinical trial expenses1,300 322Accrued fixed assets262 266Accrued construction-in-progress obligations25 60Accrued interest on notes payable— 23Other current liabilities698 448Total accruals and other current liabilities$6,245 $4,145F-21Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)8. Notes PayableHercules Notes PayableIn September 2011, the Company entered into a loan and security agreement with Hercules Technology Growth Capital for $22.0 million , referred to as the HerculesNotes Payable.The Hercules Notes Payable, which matured in March 2015 and has been repaid in full, was collateralized by all assets of the Company, and bore interest at thegreater of (i) 9.85% per annum or (ii) 9.85% per annum plus the difference of the prime rate less 3.25% per annum and contained covenants that required, among otherthings, that the Company seek consent from Hercules prior to certain corporate changes and provide certain unaudited financial information within 45 days after the end ofeach quarter and within 90 days after each year end. Starting in July 2012 , the loan was repaid in 33 equal monthly payments of principal and interest of $0.8 million plusan end of term payment of $0.4 million which was paid upon maturity. In March 2015, the Hercules Notes Payable was repaid in full.In connection with the Hercules Notes Payable, the Company issued warrants to purchase 17,977 shares of Series D convertible preferred stock at $66.75 per share,which converted to warrants to purchase common stock upon the Company's IPO. The fair value of the warrants of $0.1 million was recorded as a debt discount and isamortized to interest expense using the straight-line method over the loan term. The Company incurred $0.5 million of debt issuance costs in connection with the HerculesNotes Payable which was also amortized to interest expense over the term.The Company made principal and interest payments on the Hercules Notes Payable of $2.6 million and $9.2 million for the years ended December 31, 2015 and 2014,respectively.Essex Capital NotesOn December 20, 2013, the Company signed a Loan and Lease Agreement to borrow up to $10.8 million in the form of Secured Promissory Notes from EssexCapital, or the Essex Notes, to finance the completion and installation of the Company’s RT001 topical commercial fill to finish line, or the Fill/Finish Line. Under the Loanand Lease Agreement, with the issuance of each Note the Company issued warrants to purchase its capital stock. The Essex Notes incurred interest at 11.5% until thecompletion of the IPO in February 2014. Subsequent to the IPO, the notes incurred interest at 10.375% per annum. In December 2013, the Company drew down $2.5million under short-term notes pursuant to the Essex Capital Facility, and an additional $2.5 million in January 2014 under short-term notes. In May 2014, pursuant to theterms of this agreement, the Company sold equipment to Essex Capital, resulting in partial settlement of the outstanding loan balance by $1.1 million , and sold and leasedthe equipment back from Essex Capital for fixed monthly payments to be paid over 3 years. The lease provides for the option to purchase the leased equipment for 10% ofthe original purchase amount. This transaction did not qualify for sale-leaseback accounting due to the Company’s continuing involvement in the equipment. Therefore, theCompany accounted for this transaction as a financing obligation using the effective interest rate method.On December 17, 2014, the Company entered into the First Amendment to the Loan and Lease Agreement with Essex Capital. Under the terms of this Amendment,the Company agreed to repay the outstanding debt balance of $3.9 million and issue a warrant to purchase 44,753 shares of common stock. In February 2015, the Companyexecuted the Second Amendment to the Loan and Lease Agreement, under which the term of the facility was extended to April 15, 2015 and the purchase price for theremainder of the equipment was increased by $0.1 million to approximately $9.8 million . Concurrently with this sale, the Company will lease the equipment from EssexCapital for a fixed monthly payment to be paid monthly over 3 years. The lease provides for the option to purchase the leased equipment for 10% of the original purchaseamount. This transaction also did not qualify for sale-leaseback accounting due to the Company’s continuing involvement in the equipment. Therefore, the Companyaccounted for this transaction as a financing obligation using the effective interest rate method.In June 2015, the Company exercised its option to purchase all equipment sold and leased back from Essex Capital for 10% of the original purchase amount, orapproximately $1.1 million , at the conclusion of the lease terms.As of December 31, 2015 , the aggregate total future minimum lease payments under the financing obligation were as follows (in thousands):F-22Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)Year Ending December 31, 20164,21720173,9362018949Total payments9,102In connection with the Essex Notes, the Company issued warrants to purchase 12,345 shares of Series E-5 convertible preferred stock in both December 2013 andJanuary 2014. Subsequent to the February 2014 IPO, the previously issued warrants to purchase shares of Series E-5 convertible preferred stock converted into warrants topurchase shares of common stock. The fair value of the warrants at the issuance date of $0.2 million and debt issuance costs totaling $0.03 million were recorded asdiscount on debt, and amortized to interest expense using the straight-line method over the loan term. There was no interest expense for the amortization of the warrantrelated debt discount for the year ended December 31, 2015 . The Company recognized interest expense $0.2 million for the amortization of the warrant related debtdiscount for the year ended December 31, 2014. There was no unamortized debt discount balance as of December 31, 2015 and 2014 .Additionally, the Company made interest payments on the Essex Notes in the amount $0.4 million for year ended December 31, 2014. There was no interest expenserecorded on the Essex Notes for the year ended December 31, 2015.F-23Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)9. Convertible Notes, Warrants, and Related Derivatives2011 Convertible Notes and Common Stock WarrantsIn January 2011, the Company entered into a convertible promissory note agreement, or the 2011 Notes, and borrowed an aggregate of $40.6 million through 2012.The 2011 Notes were issued to related parties of which $30.9 million were issued to existing stockholders with holdings of 5% or more of the outstanding equity of theCompany at the time of issuance. These holders were determined to be related parties because they include holders of convertible preferred stock and board members whocould influence the conversion or redemption of the 2011 Notes.In conjunction with a Series E-5 convertible preferred stock offering in the year ended December 31, 2013, the Company, with the consent of at least 75% of theConvertible Note holders, amended the Note and Warrant Purchase Agreement under which the 2011 Notes were issued to allow for the conversion of 2011 Notes into4,748,484 shares of Series E-4 convertible preferred stock. The outstanding principal and accrued interest of the 2011 Notes of $71.0 million were converted at a price equalto 66 2 /3% of the Series E-5 offering price of $22.425 per share per the terms of the 2011 Notes. The modification of the 2011 Notes was treated as an extinguishment ofdebt, in which the resulting issuances of Series E-4 convertible preferred stock was recorded at its estimated fair value on the date of the extinguishment. The difference inthe estimated fair value of the Series E-4 convertible preferred stock and the carrying values of the outstanding principal, accrued interest and the remaining debt issuancecosts related to the 2011 Notes was recorded as a capital contribution in the amount of $32.0 million which was recognized to additional paid-in capital during the yearended December 31, 2013 . The Company recognized the capital contribution as such because, immediately prior to the conversion, substantially all of the holders of the2011 Notes were holders of the Company’s outstanding capital stock. In addition, the Company remeasured the embedded derivative to its fair value of approximately zeroimmediately prior to the conversion of the 2011 Notes in March 2013, as the execution of a qualified financing approached certainty, resulting in a gain of $1.8 million . Asof the date of conversion, the Company was in compliance with all covenants in the 2011 Notes. Also, in connection with the issuance of the 2011 Notes, the Company issued warrants to purchase 77,521 shares of common stock and with a fair value of $0.2million during the year ended December 31, 2012, with an exercise price of $0.15 per share. The relative fair value of the warrants was recorded as debt discount which wasamortized to interest expense over the loan term. The Company recognized interest expense of $0.2 million from the amortization of the warrant related debt discountsduring the year ended December 31, 2013. There was no unamortized warrant related debt discount balance beyond December 31, 2013.Also, in connection with the 2011 Notes, the Company determined that the conversion and redemption features were embedded derivatives requiring bifurcation andseparate accounting. The fair value of the derivative liabilities associated with the 2011 Notes at the time of issuance was recognized as an additional debt discount and wasamortized to interest expense over the term of the 2011 Notes. The Company recognized interest expense of $2.8 million from the amortization of the derivative liabilityrelated debt discounts during the year ended December 31, 2013. In the year ended December 31, 2013, the 2011 Notes converted into shares of Series E-4 convertiblepreferred stock. Immediately prior to the conversion, the Company determined that the fair value of the derivative liabilities associated with the convertible notes werereduced to zero . There was no unamortized derivative related debt discount balance beyond December 31, 2013.2013 Convertible Notes, Common Stock Warrants, and Related DerivativesIn October 2013, the Company entered into a convertible promissory note and warrant agreement, referred to as the 2013 Notes, to borrow up to $30.0 million . TheCompany borrowed $19.4 million in the fourth quarter of 2013. In January 2014, the Company issued an additional $4.3 million in 2013 Notes. The 2013 Notes bearinterest at 12% per annum and mature in October 2014. In February 2014, in connection with the Company’s IPO, the 2013 Notes with a principal amount, accrued interestthrough the date of the IPO, remaining interest due through October 7, 2014, and derivative liability totaling $26.2 million converted into 1,637,846 shares of theCompany’s common stock.In connection with the issuance of the 2013 Notes, the Company issued warrants to purchase 409,450 shares of common stock, which were net exercised for 405,594shares of common stock upon the IPO.Additionally, the 2013 Notes had conversion and redemption features which were determined to be embedded derivatives, requiring bifurcation and separate fairvalue accounting. Immediately prior to the conversion, the Company determined that the fair value of the derivative liabilities associated with the convertible notes wasreduced to $1.9 million , the value of interest due to note holders from the date of the IPO through the maturity date of the loan in October 2014.F-24Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)Upon the conversion of the 2013 Notes into shares of common stock, the Company applied extinguishment accounting resulting in a loss of $8.3 million . As of thedate of conversion, the Company was in compliance with all covenants in the 2013 Notes.During the three months ended March 31, 2014, the Company recognized non-cash interest expense of $9.6 million related to the 2013 Notes, includingamortization of warrant-related debt discount of approximately $0.4 million up to the date of conversion, amortization of the derivative-related debt discount of $0.6 millionup to the date of conversion, accrued interest of $0.3 million up to the date of conversion and a loss on extinguishment of $8.3 million upon conversion of the 2013 Notesinto common stock.F-25Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)10. Interest ExpenseInterest expense, includes cash and non-cash components with the non-cash components consisting of (i) interest recognized from the amortization of debtissuance costs, which were capitalized on the Condensed Consolidated Balance Sheets, that are generally derived from cash payments related to the issuance of convertiblenotes and notes payable, (ii) interest recognized from the amortization of debt discounts, which were capitalized on the Condensed Consolidated Balance Sheets, derivedfrom the issuance of warrants and derivatives issued in conjunction with convertible notes and notes payable, (iii) interest recognized on the 2011 convertible notes, or 2011Notes, which was not paid but instead converted into shares of convertible preferred stock, (iv) interest recognized on the 2013 convertible notes, or 2013 Notes, which wasnot paid but instead converted into shares of common stock, (v) interest capitalized for assets constructed for use in operations, (vi) interest related to the extinguishment ofdebt, which is classified as a gain or loss on debt extinguishments, and (vii) effective interest recognized on the financing obligation. The capitalized amounts related to thedebt issuance costs and debt discounts are generally amortized to interest expense over the term of the related debt instruments.The interest expense by cash and non-cash components is as follows (in thousands): Year Ended December 31, 2015 2014 2013Interest expense Cash related interest expense (1)$(802) $(1,182) $(1,590) Non-cash interest expense Non-cash interest expense — debt issuance costs(39) (203) (490)Non-cash interest expense — warrant and derivative related debt discounts(5) (650) (4,128)Non-cash interest expense — convertible notes— (1,250) (9,409)Loss on extinguishment of 2013 Notes— (8,331) —Effective interest on financing obligation(344) (28) —Capitalized interest expense (2)— 972 453Total non-cash interest expense(388) (9,490) (13,574) Total interest expense$(1,190) $(10,672) $(15,164) (1)Cash related interest expense included interest payments to Hercules Notes Payable and Essex Notes.(2)Interest expense capitalized pursuant to Accounting Standards Codification Topic 835, Interest .F-26Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)11. Commitments and ContingenciesFacility LeaseIn January 2010, the Company entered into a non-cancelable facility lease that requires monthly payments through January 2022. This facility will be used forresearch, manufacturing, and administrative functions. In February 2014, the Company extended the term of the Lease by thirty-six ( 36 ) months to January 2025. As part of this agreement, the Lessor provided theCompany with a tenant improvement allowance during 2014 in an amount not to exceed $3.0 million . Under the terms of the lease agreement, the Company will make totalrent payments of $72.8 million for a period of 15 years commencing in January 2010. This lease was determined to be an operating lease. The payments escalate over theterm of the lease with the exception of a decrease in payments at the beginning of 2022, however, the Company recognizes the expense on a straight-line basis over the lifeof the lease.Rent expense for the years ended December 31, 2015 , 2014 , and 2013 was $5.3 million , $5.2 million , and $4.4 million . As of December 31, 2015 , the aggregatetotal future minimum lease payments under non-cancelable operating leases were as follows (in thousands): Year Ending December 31, 2016$5,22220175,39420185,57820195,7632020 and thereafter26,591Total payments$48,548Other Milestone-Based CommitmentsThe Company has one remaining obligation to make a future milestone payment to List Laboratories that becomes due and payable on the achievement of a certainregulatory milestone. The Company is obligated to pay royalties to List Laboratories on future sales of botulinum toxin products. The Company also has one remainingfuture milestone payment of $4.0 million due and payable to Valeant Pharmaceuticals International, Inc. upon the achievement of regulatory approval for RT001 topical orRT002 injectable (Note 4).Purchase CommitmentsThe Company has certain commitments from outstanding purchase orders primarily related to clinical trial development and other costs related to the Company’smanufacturing facility. These agreements, which total $20.2 million , are cancellable at any time with the Company required to pay all costs incurred through thecancellation date.ContingenciesFrom time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. As of May 2015, the Company becamesubject to a securities class action complaint, captioned City of Warren Police and Fire Retirement System v. Revance Therapeutics Inc., et al, CIV 533635, which was filedon behalf of City of Warren Police and Fire Retirement System in the Superior Court for San Mateo County, California against the Company and certain of its directors andexecutive officers at the time of the June 2014 follow-on public offering, and the investment banking firms that acted as the underwriters in the follow-on public offering. Ingeneral, the complaint alleges that the defendants misrepresented the then-present status of the RT001 topical clinical program and made false and misleading statementsregarding the formulation, manufacturing and efficacy of its drug candidate, RT001 topical, for the treatment of lateral canthal lines at the time of the follow-on publicoffering. The complaint has been brought as a purported class action on behalf of those who purchased common stock in the follow-on public offering and seeks unspecifiedmonetary damages and other relief. On October 5, 2015, the Company made a motion for transfer of the action to the Superior Court for the County of Santa Clara on thebasis that venue was improper in San Mateo County. Plaintiff’s counsel did not oppose the transfer motion, and the action was received by Santa Clara Superior Court onNovember 6, 2015 and assigned the following case number, 15-CV-287794. F-27Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. At thistime, neither the outcome of this matter, nor an estimate of the maximum potential exposure or the range of possible loss can be determined. The Company believes that theclass action lawsuit is without merit and intends to vigorously defend the action. Nevertheless, this litigation, as any other litigation, is subject to uncertainty and there canbe no assurance that this litigation will not have a material adverse effect on the Company's business, results of operations, financial position or cash flows. IndemnificationThe Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holdsharmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent orother intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual after theexecution of the agreement. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinablebecause it involves claims that may be made against the Company in the future, but have not yet been made. The Company has not incurred costs to defend lawsuits orsettle claims related to these indemnification agreements.The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers againstliabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual.No amounts associated with such indemnifications have been recorded to date.F-28Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)12. Common StockAs of December 31, 2015 , the Company was authorized to issue up to 95,000,000 shares of par value $0.001 per share common stock.As of December 31, 2015 and 2014 , the Company had no shares of common stock subject to repurchase. The Company has also issued shares of common stock as aresult of stock option exercises throughout its existence. Common stockholders are entitled to dividends when and if declared by the Board of Directors subject to the priorrights of the preferred stockholders. The holder of each share of common stock is entitled to one vote. The common stockholders voting as a class are entitled to elect onemember to the Company’s Board of Directors. As of December 31, 2015 , no dividends have been declared.The Company had reserved shares of common stock, on an as if converted basis, for issuance as follows: As of December 31, 2015 2014Issuances under stock incentive plans273,948 91,634Issuances upon exercise of common stock warrants61,595 198,662Issuances under employee stock purchase plan396,660 174,661Issuances under inducement plan449,889 141,500 1,182,092 606,457F-29Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)13. Convertible Preferred StockUpon completion of the Company’s IPO in February 2014, all shares of convertible preferred stock were converted into 8,689,999 shares of common stock at a ratioof 1 :1. As of December 31, 2015 and 2014 , there was no preferred stock outstanding.Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)14. WarrantsIn January 2014, in connection with the Company’s issuance of notes payable to Essex Capital (Note 8), the Company issued warrants to purchase 12,345 shares ofSeries E-5 convertible preferred stock. In February 2014, two holders of preferred stock warrants exercised their put options to sell 22,856 warrants at an exercise priceequal to the average fair value of the Company’s stock price for 5 days preceding the exercise. The Company recorded a loss on cash settlement of $1.4 million as a resultof this exercise. Upon completion of the IPO, all outstanding warrants to purchase Series E convertible preferred stock, excluding the 22,856 warrants that were exercised,converted into 173,975 warrants to purchase common stock at prices ranging from $14.95 per share to $31.50 per share, expiring in 2018 through 2021. As of December 31,2015 and 2014 , the Company had no convertible preferred stock warrants outstanding.In January 2014, the Company issued warrants to purchase 72,248 shares of common stock in connection with the issuance of the most recent round of the 2013Notes (Note 9). In February 2014, following the completion of the Company’s IPO, all outstanding common stock warrants net exercised into 1,158,443 shares of commonstock. In May 2014, warrants to purchase 20,066 shares of common stock were net exercised into 10,613 shares of common stock. In December 2014, the Company issuedEssex Capital 44,753 common stock warrants with an exercise price of $14.40 in connection with the First Amendment to the Loan and Lease Agreement as discussed inNote 8. The fair value was determined to be $0.4 million upon issuance. The fair value of the warrants upon issuance was determined using a Black-Scholes option-pricingmodel with the following assumptions: expected volatility of 53% , contractual term of 4 years and risk-free rate of 1.4% . The fair value of the common stock warrants wasrecorded to additional paid-in capital upon issuance.In the fourth quarter of 2015, three holders of common stock warrants net exercised warrants to purchase 137,067 shares into 68,993 shares of common stock atexercise prices ranging from $14.40 to $22.43 .As of December 31, 2015 and 2014 , the Company had warrants to purchase 61,595 and 198,662 shares of common stock outstanding, respectively, with a weightedaverage exercise price of $16.78 and $18.12 , respectively, and with exercise prices ranging from $14.40 to $31.50 .F-31Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)15. Net Income (Loss) per Share Attributable to Common StockholdersThe following table sets forth the computation of the Company’s basic and diluted net income (loss) per share attributable to common stockholders for the yearsended December 31, 2015 , 2014 , and 2013 (in thousands, except for share and per share amounts): Year Ended December 31, 2015 2014 2013Net loss$(73,476) $(62,917) $(52,448)Capital contribution on the extinguishment of prior convertible preferred stock— — 74,894Deemed dividend on the issuance of Series E-5 convertible preferred stock— — (177)Noncumulative dividend on Series E convertible preferred stock— — (13,878)Undistributed earnings allocated to preferred stockholders— — (8,133)Net income (loss) attributable to common stockholders, basic(73,476) (62,917) 258Adjustments to net income (loss) for dilutive securities— — 825Net income (loss) attributable to common stockholders, diluted$(73,476) $(62,917) $1,083Net income (loss) per share attributable to common stockholders Basic$(3.02) $(3.24) $1.17Diluted$(3.02) $(3.24) $1.05Weighted-average shares used in computing net income (loss) per share attributable to commonstockholders: Basic24,340,466 19,391,523 220,220Stock options— — 167,655Warrants to purchase common stock— — 641,275Diluted24,340,466 19,391,523 1,029,150 The following common stock equivalents were excluded from the computation of diluted net income (loss) per share for the periods presented because including themwould have been antidilutive: As of December 31, 2015 2014 2013Stock options2,420,105 1,818,323 —Convertible preferred stock— — 8,689,999Convertible preferred stock warrants— — 184,486Common stock warrants61,595 198,662 —Unvested restricted stock awards315,600 251,325 —F-32Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)16. Stock Option PlanEquity Incentive PlansOn January 23, 2014, the stockholders' approved the adoption of the 2014 Equity Incentive Plan, or 2014 EIP. Initially, the aggregate number of shares of commonstock that may be issued pursuant to stock awards under the 2014 EIP will not exceed 1,000,000 shares. The number of shares of common stock reserved for issuance underthe Company’s 2014 EIP will automatically increase on January 1 of each year, beginning on January 1, 2015, and continuing through and including January 1, 2024, by4% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year or a lesser number of shares determined by theCompany’s Board of Directors. The maximum number of shares that may be issued upon the exercise of ISOs under the Company’s 2014 EIP is 2,000,000 shares. The2014 EIP provides for the grant of incentive stock options, or ISOs, nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stockunit awards, performance-based stock awards, and other forms of equity compensation, all of which may be granted to employees, including officers, non-employeedirectors and consultants of the Company and its affiliates. Additionally, the 2014 EIP provides for the grant of performance cash awards. ISOs may be granted only toemployees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants. Under the 2014 EIP, options may be grantedwith different vesting terms from time to time, but not to exceed 10 years from the date of grant. Upon the effectiveness of the 2014 Plan, the Company ceased granting anyequity awards under the 2012 Equity Incentive Plan and any cancelled or forfeited shares under the 2012 and 2002 Equity Incentive Plans will be retired.On January 1, 2015, the number of shares of common stock reserved for issuance under the Company’s 2014 Equity Incentive Plan, or 2014 EIP, automaticallyincreased by 4% of the total number of shares of the Company’s common stock outstanding on December 31, 2014, or 950,978 shares. During the year ended December 31,2015 , the Company granted stock options for 747,338 shares of common stock and 169,336 restricted stock awards under the 2014 EIP, including a stock option grants for90,000 shares to non-employee directors. As of December 31, 2015 , there were 273,948 shares available for issuance under the 2014 EIP.2014 Inducement PlanOn August 26, 2014, the Company’s Board of Directors authorized the adoption of the 2014 Inducement Plan, or 2014 IN, which became effective immediately.Stockholder approval of the 2014 IN was not required pursuant to Rule 5635 (c)(4) of the NASDAQ Listing Rules. The 2014 IN reserves 325,000 shares of common stockand provides for the grant of NSOs that will be used exclusively for grants to individuals that were not previously employees or directors of the Company, as an inducementmaterial to the individual’s entry into employment with the Company. On December 14, 2015, the Company’s Board of Directors authorized an additional 500,000 sharesof common stock to be reserved for issuance under the 2014 IN. Under the 2014 IN, options may be granted with different vesting terms from time to time, but not toexceed 10 years from the date of grant. During the year ended December 31, 2015 , the Company granted stock options for 206,250 shares of common stock and 34,375restricted stock awards under the 2014 IN. As of December 31, 2015 , there were 449,889 shares available for issuance under the 2014 IN.Under the 2014 EIP and the 2014 IN plan, restricted stock awards typically vest annually over 1 , 3 , or 4 years , while options typically vest over four years , eitherwith 25% of the total grant vesting on the first anniversary of the option grant date and 1/36th of the remaining grant vesting each month thereafter or 1/48th vestingmonthly. F-33Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)The following summary of stock option and restricted stock award activity, excluding 2014 IN, for the periods presented is as follows: Number ofSharesAvailablefor Grant Number ofSharesUnderlyingOutstandingOptions WeightedAverageExercisePrice PerShare WeightedAverageRemainingContractualLife (inYears) AggregateIntrinsicValue (In thousands)Balance as of December 31, 201232,985 306,317 $3.45 — $—Additional shares reserved1,080,661 — — Options granted(992,213) 992,213 8.80 Options exercised— (4,340) 2.55 Options cancelled/forfeited81,125 (81,125) 6.42 Balance as of December 31, 2013202,558 1,213,065 7.65 Additional shares reserved1,000,000 — — Options granted(728,349) 728,349 30.21 Awards granted(212,450) 212,450 — Options exercised— (238,999) 5.96 Options cancelled/forfeited14,600 (14,600) 26.89 Awards forfeited4,500 (4,500) — Shares cancelled/retired under 2002/2012 plans(189,225) (9,617) — Balance as of December 31, 201491,634 1,886,148 17.90 Additional shares reserved950,978 — — Options granted(747,338) 747,338 18.94 Awards granted(169,336) 169,336 — Options exercised— (205,735) 11.84 Options cancelled/forfeited116,540 (116,540) 21.33 Awards forfeited24,306 (24,306) — Awards released— (74,755) — Shares cancelled/retired under 2002/2012 plans(19,276) — — Shares traded for taxes26,440 — — Balance as of December 31, 2015273,948 2,381,486 $18.36 8.1 $33,274Options vested and expected to vest as of December 31,2015 2,070,287 $18.28 8.0 $32,926Exercisable as of December 31, 2015 870,911 $16.30 7.4 $15,558The intrinsic values of outstanding, vested and exercisable options were determined by multiplying the number of shares by the difference in exercise price of theoptions and the fair value of the common stock as of December 31, 2015 of $34.16 per share.The total intrinsic values of options exercised as of December 31, 2015 , 2014 and 2013 of $4.6 million , $2.6 million and $0.04 million were determined bymultiplying the number of shares by the difference in exercise price of the options and the fair value of the common stock as of December 31, 2015 , 2014 , and 2013 of$34.16 , $16.94 and $11.40 per share.F-34Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)The following table summarizes the stock option activity for the 2014 IN is as follows: Number of Shares Available for Grant Number of Shares Underlying Outstanding Options andAwards Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (In thousands)Shares reserved325,000 — $— — $—Options granted(140,125) 140,125 $22.52 Restricted stock awards granted(43,375) 43,375 $— Outstanding as of December 31, 2014141,500 183,500 $22.52 $—Additional shares reserved500,000 Options granted(206,250) 206,250 $36.32 Restricted stock awards granted(34,375) 34,375 — Option forfeitures29,531 (29,531) $22.97 Award forfeitures9,843 (9,843) $— Awards released— (30,532) $— Traded for taxes9,640 — $— Outstanding as of December 31, 2015449,889 354,219 $31.46 7.2 $1,300Options vested and expected to vest as of December 31, 2015 314,221 $31.49 7.1 $1,281Exercisable as of December 31, 2015 95,469 $22.77 0.9 $1,088The following table summarizes information with respect to stock options outstanding and currently exercisable as of December 31, 2015 : Options Outstanding OptionsExercisableExercise PriceNumber ofOptions Weighted-AverageRemainingContractual Life(In Years) $0.45 - 6.6076,838 4.3 76,231$8.70549,097 7.4 319,747$8.85 - 16.10249,223 8.3 95,345$16.23384,977 8.5 102,776$16.46 - 22.97264,953 6.2 101,164$24.58 - 32.00222,945 8.7 110,719$32.22430,822 8.4 158,762$32.81 - 36.32229,250 9.9 1,636$37.6910,000 9.9 —$39.572,000 9.9 — 2,420,105 966,380F-35Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)The following table summarizes information with respect to restricted stock awards outstanding as of December 31, 2015 : Number of Awards Available for Grant Weighted-AverageGrant-Date Fair Value Aggregate Intrinsic Value (In thousands)Outstanding as of December 31, 2013— $— $—Granted255,825 29.47 —Vested— — —Forfeited(4,500) 26.89 —Outstanding as of December 31, 2014251,325 $29.51 —Granted203,711 21.55 —Vested(105,287) 27.79 —Forfeited(34,149) 22.77 —Outstanding as of December 31, 2015315,600 $25.67 $10,781Stock Options Granted to Employees and Non-employee DirectorsDuring the years ended December 31, 2015 , 2014 and 2013 , the Company granted stock options to employees and non-employee directors to purchase shares ofcommon stock with a weighted-average grant date fair value of $22.70 , $29.31 and $8.23 per share. As of December 31, 2015 , 2014 and 2013 , there was totalunrecognized compensation cost for outstanding stock options and restricted stock awards of $21.5 million , $19.1 million and $3.2 million to be recognized over a periodof approximately 2.8 years , 3.0 years , and 3.2 years , respectively.The fair value of the employee and non-employee director stock options was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2015 2014 2013Expected term (in years)6.0 6.0 6.0Expected volatility62.2% 57.4% 59.1%Risk-free interest rate1.6% 1.9% 1.3%Expected dividend rate0.0% 0.0% 0.0%Fair Value of Common Stock . The fair value of the shares of common stock is based on the Company's stock price. Prior to the IPO, the fair value of the shares ofcommon stock underlying the stock options has historically been determined by the Board of Directors. Because there was no public market for the Company’s commonstock, the Board of Directors has determined fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factorsincluding valuation of comparable companies, sales of convertible preferred stock to unrelated third parties, operating and financial performance, the lack of liquidity ofcapital stock, and general and industry specific economic outlook, amongst other factors.Expected Term . The expected term for employees and non-employee directors is based on the simplified method, as the Company’s stock options have the followingcharacteristics: (i) granted at-the-money; (ii) exercisability is conditioned upon service through the vesting date; (iii) termination of service prior to vesting results inforfeiture; (iv) limited exercise period following termination of service; and (v) options are non-transferable and non-hedgeable, or “plain vanilla” options, and theCompany has limited history of exercise data. The expected term for non-employees is based on the remaining contractual term.F-36Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)Expected Volatility . Since the Company was a private entity with no historical data regarding the volatility of its common stock, the expected volatility used is basedon volatility of a group of similar entities. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size. The Company willcontinue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available.Risk-Free Interest Rate . The risk-free interest rate is based on U.S. Treasury constant maturity rates with remaining terms similar to the expected term of the options.Expected Dividend Rate . The Company has never paid any dividends and does not plan to pay dividends in the foreseeable future, and, therefore, used an expecteddividend rate of zero in the valuation model.Forfeitures. The Company is required to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ fromthose estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock based compensation expense only for those awards that areexpected to vest. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period that the estimates arerevised.Stock Options Granted to ConsultantsDuring the year ended December 31, 2015 , the Company did not grant options to purchase shares of common stock to consultants; however, grants to consultantswere made prior to 2015 and two employees converted to consultants during 2015.Stock-based compensation expense related to stock options granted to consultants (other than non-employee directors) is recognized as the stock options are earned.During the years ended December 31, 2014 and 2013 , the Company granted options to purchase 13,333 shares and 76,666 shares of common stock to consultants with aweighted-average exercise price of $15.45 and $8.74 per share.Stock-based compensation expense related to stock options granted to consultants is recognized as the stock options are earned. The Company believes that the fairvalue of the stock options is more reliably measurable than the fair value of services received. The fair value of the stock options vested is calculated at each reporting dateusing the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2015 2014 2013Expected term (in years)8.2 7.3 9.0Expected volatility73.0% 56.1% 58.8%Risk-free interest rate2.0% 2.1% 2.7%Expected dividend rate0.0% 0.0% 0.0% 2014 Employee Stock Purchase PlanOn January 22, 2014, the Company’s Board of Directors authorized the adoption of the 2014 Employee Stock Purchase Plan, or 2014 ESPP, which became effectiveafter adoption and approval by the Company’s stockholders on January 23, 2014. The maximum number of shares of common stock that may be issued under theCompany’s 2014 ESPP was initially 200,000 shares. The number of shares of common stock reserved for issuance under the Company’s 2014 ESPP will automaticallyincrease on January 1 of each year, beginning on January 1, 2015 and ending on and including January 1, 2024, by the lesser of (i) 1% of the total number of shares ofcommon stock outstanding on December 31 of the preceding calendar year, (ii) 300,000 shares of common stock or (iii) such lesser number of shares of common stock asdetermined by the Company’s Board of Directors. Shares subject to purchase rights granted under the Company’s 2014 ESPP that terminate without having been exercisedin full will return to the 2014 ESPP reserve and will not reduce the number of shares available for issuance under the Company’s 2014 ESPP. The 2014 ESPP is intended toqualify as an “employee stock purchase plan,” or ESPP, under Section 423 of the Internal Revenue Code of 1986 with the purpose of providing employees with anopportunity to purchase the Company’s common stock through accumulated payroll deductions.F-37Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)On January 1, 2015, the number of shares of common stock reserved for issuance under the Company’s 2014 Employee Stock Purchase Plan, or 2014 ESPP,automatically increased by 1% of the total number of shares of the Company’s capital stock outstanding on December 31, 2014, or 237,744 shares. As of December 31,2015 , there were 396,660 shares available for issuance under the 2014 ESPP. For the year ended December 31, 2015 , the Company recorded stock-based compensationexpense of $0.1 million and issued 15,745 shares of common stock to employees under the 2014 ESPP.The fair value of the option component of the shares purchased under the 2014 ESPP was estimated using the Black-Scholes option-pricing model with the followingweighted-average assumptions: Year Ended December 31, 2015 2014Expected term (in years)0.5 0.5Expected volatility63.4% 46.8%Risk-free interest rate0.2% 0.1%Expected dividend rate—% —%Fair Value of Common Stock . The fair value of the shares of common stock is based on the Company’s stock price.Expected Term . The expected term is based on the term of the purchase period under the 2014 ESPP.Expected Volatility . Since the Company was a private entity with little historical data regarding the volatility of its common stock, the expected volatility used isbased on volatility of a group of similar entities. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size. The Company willcontinue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available.Risk-Free Interest Rate . The risk-free interest rate is based on U.S. Treasury constant maturity treasury rates with remaining terms similar to the expected term.Expected Dividend Rate . The Company has never paid any dividends and does not plan to pay dividends in the foreseeable future, and, therefore, used an expecteddividend rate of zero in the valuation model.Total Stock-Based CompensationTotal stock-based compensation expense related to options, awards, and ESPP to employees and non-employees was allocated as follows (in thousands): Year Ended December 31,2015 2014 2013Research and development$6,511 $2,357 $194General and administrative5,877 4,173 354Total stock-based compensation expense$12,388 $6,530 $548There were no capitalized stock-based compensation costs or recognized stock-based compensation tax benefits during the years ended December 31, 2015 , 2014 ,and 2013 .On October 31, 2015, the Company entered into a separation agreement with one of its employees, pursuant to which the Company agreed to accelerate vesting of aportion of the employee’s outstanding stock options and restricted stock awards.As the employee would have forfeited the unvested awards upon termination under the awards’ original terms, the awards would not be expected to vest under theoriginal service conditions. The acceleration in vesting of the unvested awards resulted in a Type III modification, which occurs when there is a change from an improbableto probable vesting condition. The Company recognized the incremental fair value, which was equal to the fair value of the awards on the modification date, and recognizedthe stock-based compensation over the remaining requisite service period. During the year ended December 31, 2015, the Company recorded $2.4 million of stock-basedcompensation expense in connection with this modification.F-38Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)17. Income TaxesSince inception, the Company has only generated pretax losses in the United States and has not generated any pretax income or loss outside of the United States. TheCompany did not record a provision (benefit) for income taxes for the years ended December 31, 2015 , 2014 , and 2013 . Significant components of the Company’sdeferred tax assets as of December 31, 2015 and 2014 consist of the following (in thousands): Year Ended December 31, 2015 2014Deferred tax assets: Net operating loss carryforward$115,949 $92,859Accruals and reserves2,371 2,458Stock based compensation3,367 1,602Tax credits3,311 2,623Fixed and intangible assets4,935 5,223Valuation Allowance(129,933) (104,765)Total deferred tax assets— —Deferred tax liabilities: Debt discount— —Total deferred tax liabilities— —Net deferred tax assets$— $—Reconciliations of the statutory federal income tax (benefit) to the Company’s effective tax for the years ended December 31, 2015 , 2014, and 2013 are as follows (inthousands): Year Ended December 31, 2015 2014 2013Tax (benefit) at statutory federal rate$(24,982) $(21,392) $(17,832)State Tax (benefit) — net of federal benefit— 79 849Permanent differences224 660 3,931Debt discount— 756 2,888Research and development credits(516) 3,137 (642)Other607 537 284Change in valuation allowance$24,667 $16,226 $10,522Provision for taxes$— $3 $— The valuation allowance is determined using an assessment of both negative and positive evidence. Based on the available objective evidence and the Company’shistory of losses management believes it is more likely than not that the net deferred tax assets will not be realized. The Company has established a valuation allowance tooffset deferred tax assets as of December 31, 2015 and 2014 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and otherdeferred tax assets. The valuation allowance increased by $25.2 million and $19.3 million during the years ended December 31, 2015 and 2014 , respectively. The valuationallowance increased primarily due to an increase in the net operating loss carryforwards incurred during the taxable years. During the year ended 2015, the Companyperformed an analysis of the fixed and intangible assets and NOL carry forwards to assess whether an additional carryforward may be available to offset future taxableincome. Based on this analysis, the Company corrected the fixed and intangible assets to $5.2 million and the NOL carryforward to $92.9 million as of December 31, 2014. The fixed and intangible assets and the NOL carryforward were previously presented in our annual report on Form 10-K for year ended December 31, 2014 as $1.7 millionand $93.3 million , respectively.As of December 31, 2015 , the Company had net operating loss carryforwards available to reduce future taxable income, if any, for Federal, California, and NewJersey income tax purposes of $318.2 million , $162.3 million , and $243.8 million ,F-39Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)respectively. If not utilized, the Federal net operating loss carryforward begin expiring in 2020, the California net operating loss carryforwards began expiring in 2010, andthe New Jersey state net operating loss carryforwards begin expiring in 2030. The Company recognizes excess tax benefits associated with the exercise of stock optionsdirectly to stockholders’ equity only when realized. The net operating loss related deferred tax assets do not include excess tax benefits from employee stock optionexercises. As of December 31, 2015 , the net operating loss reported as a deferred tax asset for Federal and State purposes does not include approximately $8.0 millionattributable to excess stock option deductions. The Company follows with or without method to determine when such net operating loss has been realized.As of December 31, 2015 , the Company also had research and development credit carryforwards of $1.0 million and $5.1 million available to reduce future taxableincome, if any, for Federal and California state income tax purposes, respectively. If not utilized, the Federal credit carryforwards will begin expiring in 2023 and theCalifornia credit carryforwards have no expiration date.In general, if the Company experiences a greater than 50 percentage point aggregate change in ownership over a 3-year period (a Section 382 ownership change),utilization of its pre-change NOL carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code (California and New Jersey have similarlaws). The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change (subject to certain adjustments)by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforwards before utilization. The Company determinedthat an ownership change occurred on April 7, 2004 but that all carryforwards can be utilized prior to the expiration. The Company also determined that an ownershipchange occurred in February 2014. As a result of the 2014 change, approximately $1.4 million of federal net operating loss carryforwards and $4.8 million of federalresearch and development, or R&D, credits are expected to expire unused. During the year ended December 31, 2014 , the Company derecognized $1.4 million of federalNOLs and $4.8 million of federal R&D credits. Since the R&D credits for California carry over indefinitely, there was no change to the California R&D credits. TheCompany has reviewed its IRC §382 limitation through December 31, 2015 and have not identified any ownership changes resulting in a limitation.The ability of the Company to use its remaining NOL carryforwards may be further limited if the Company experiences a Section 382 ownership change inconnection with an IPO or as a result of future changes in its stock ownership.The Company follows the provisions of FASB’s guidance for accounting for uncertain tax positions. The guidance prescribes a comprehensive model for therecognition, measurement, presentation and disclosure in financial statements of any uncertain tax positions that have been taken or expected to be taken on a tax return. Noliability related to uncertain tax positions is recorded in the financial statements due to the fact the liabilities have been netted against deferred attribute carryovers. It is theCompany’s policy to include penalties and interest related to income tax matters in income tax expense.The unrecognized tax benefit was $1.5 million and $1.3 million at December 31, 2015 and December 31, 2014 , respectively. The Company does not expect that itsuncertain tax positions will materially change in the next twelve months. No liability related to uncertain tax positions is recorded on the financial statements. During theyear ending December 31, 2014 , the amount of unrecognized tax benefits decreased due to limitation of research and development credits for prior periods offset by anincrease for additional research and development credits generated during the year. The reversal of the uncertain tax benefits would not impact the Company’s effective taxrate to the extent that the Company continues to maintain a full valuation allowance against its deferred tax assets.The unrecognized tax benefit was as follows (in thousands):F-40Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued) Unrecognized tax benefitsBalance as of December 31, 20122,012Additions for current tax positions276Balance as of December 31, 20132,288Decrease for prior tax positions(1,216)Additions for current tax positions196Balance as of December 31, 20141,268Additions for prior tax positions10Additions for current tax positions$259Balance as of December 31, 2015$1,537The Company files income tax returns in the United States, California, and in New Jersey. The Company is not currently under examination by income tax authoritiesin federal, state or other jurisdictions. All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from thedate of utilization of any net operating loss or tax credits.F-41Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)18. Defined Contribution PlanThe Company sponsors a defined contribution plan under Section 401(k) of the Internal Revenue Code covering substantially all employees over the age of 18 years.Contributions made by the Company are voluntary and are determined annually by the Board of Directors on an individual basis subject to the maximum allowable amountunder federal tax regulations. The Company has made no contributions to the plan since its inception.19. Subsequent EventsOn February 2, 2016, the Company granted 60,000 stock options and 10,000 restricted stock awards under the 2014 EIP to an executive employee. The aggregategrant date fair value is estimated to be $0.9 million . On February 9, 2016, the Company granted 225,000 stock options and 33,000 restricted stock awards under the 2014EIP to executive employees and granted 196,500 stock options and 98,250 restricted stock awards under the 2014 EIP to employees. The aggregate grant date fair value isestimated to be $6.4 million . F-42Table of ContentsREVANCE THERAPEUTICS, INC.Notes to Consolidated Financial Statements — (Continued)20. Quarterly Results of Operations (Unaudited)The following amounts are in thousands, except per share amounts: For the Quarters Ended March 31, June 30, September 30, December 31, 2015Revenue$75 $75 $75 $75Net loss$(15,402) $(16,805) $(19,175) $(22,094)Net income (loss) attributable to common stockholders: Basic$(15,402) $(16,805) $(19,175) $(22,094)Diluted$(15,402) $(16,805) $(19,175) $(22,094)Net income (loss) per share attributable to common stockholders: Basic$(0.65) $(0.71) $(0.81) $(0.83)Diluted$(0.65) $(0.71) $(0.81) $(0.83) 2014Revenue$158 $75 $75 $75Net loss$(21,426) $(13,302) $(13,977) $(14,212)Net income (loss) attributable to common stockholders: Basic$(21,426) $(13,302) $(13,977) $(14,212)Diluted$(21,426) $(13,302) $(13,977) $(14,212)Net income (loss) per share attributable to common stockholders: Basic$(1.93) $(0.69) $(0.60) $(0.60)Diluted$(1.93) $(0.69) $(0.60) $(0.60) F-43Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized, in the City of Newark, State of California on the 4 th day of March, 2016. REVANCE THERAPEUTICS, INC. By: /s/ L. Daniel Browne L. Daniel Browne President and Chief Executive OfficerPOWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints L. Daniel Browne and Lauren P.Silvernail, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution for him or her, and in his or her name in any and allcapacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith,with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and everyact and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming allthat said attorneys-in-fact and agents, and any of them, his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of theRegistrant and in the capacities and on the dates indicated. SignaturesTitleDate /s/ L. Daniel BrownePresident, Chief ExecutiveMarch 4, 2016L. Daniel BrowneOfficer and Director (Principal Executive Officer) /s/ Lauren P. SilvernailChief Financial Officer andMarch 4, 2016Lauren P. SilvernailChief Business Officer (Principal Financial and Accounting Officer) /s/ Angus C. RussellDirector, ChairmanMarch 4, 2016Angus C. Russell /s/ Robert ByrnesDirectorMarch 4, 2016Robert Byrnes /s/ Ronald W. EastmanDirectorMarch 4, 2016Ronald W. Eastman /s/ Phyllis GardnerDirectorMarch 4, 2016Phyllis Gardner, M.D. Table of ContentsSignaturesTitleDate /s/ James GlasheenDirectorMarch 4, 2016James Glasheen, Ph.D. /s/ Mark A. Prygocki, Sr.DirectorMarch 4, 2016Mark A. Prygocki, Sr. /s/ Jonathan TunnicliffeDirectorMarch 4, 2016Jonathan Tunnicliffe /s/ Philip J. VickersDirectorMarch 4, 2016Philip J. Vickers, Ph.D. /s/ Ronald WootenDirectorMarch 4, 2016Ronald Wooten Table of ContentsEXHIBIT INDEX ExhibitNumber Exhibit Description Form File No. IncorporatedbyReference Exhibit Filing Date FiledHerewith3.1 Amended and Restated Certificate of Incorporation 8-K 001-36297 3.1 February 11, 2014 3.2 Amended and Restated Bylaws S-1 333-193154 3.4 December 31, 2013 4.1 Amended and Restated Investor Rights Agreement, effectiveas of February 5, 2014, among Revance Therapeutics, Inc.and certain of its stockholders S-1/A 333-193154 4.3 January 27, 2014 4.2 Form of Common Stock Certificate S-1/A 333-193154 4.4 February 3, 2014 10.1 * Revance Therapeutics, Inc. 2002 Equity Incentive Plan S-1 333-193154 10.1 December 31, 2013 10.2 * Form of Stock Option Agreement and Option Grant Noticefor Revance Therapeutics, Inc. 2002 Equity Incentive Plan S-1 333-193154 10.2 December 31, 2013 10.3 * Revance Therapeutics, Inc. Amended and Restated 2012Equity Incentive Plan S-1 333-193154 10.3 December 31, 2013 10.4 * Form of Stock Option Agreement and Option Grant Noticefor Revance Therapeutics, Inc. Amended and Restated 2012Equity Incentive Plan S-1 333-193154 10.4 December 31, 2013 10.5 * Revance Therapeutics, Inc. 2014 Equity Incentive Plan S-1/A 333-193154 10.5 January 27, 2014 10.6 * Form of Restricted Stock Unit Award Agreement and GrantNotice for Revance Therapeutics, Inc. 2014 Equity IncentivePlan X10.7* Form of Stock Option Agreement and Grant Notice forRevance Therapeutics, Inc. 2014 Equity Incentive Plan 10-Q 001-36297 10.3 November 10, 2015 10.8* Form of Restricted Stock Bonus Agreement and GrantNotice for Revance Therapeutics, Inc. 2014 Equity IncentivePlan X10.9* Revance Therapeutics, Inc. 2014 Employee Stock PurchasePlan S-1/A 333-193154 10.7 January 27, 2014 10.10* Form of Indemnity Agreement by and between RevanceTherapeutics, Inc. and each of its officers and directors S-1/A 333-193154 10.8 January 27, 2014 10.11 Lease Agreement dated March 31, 2008 by and betweenRevance Therapeutics, Inc. and BMR-Gateway BoulevardLLC S-1 333-193154 10.9 December 31, 2013 10.12 First Amendment to Office Lease dated April 7, 2008 by andbetween Revance Therapeutics, Inc. and BMR-GatewayBoulevard LLC S-1 333-193154 10.1 December 31, 2013 10.13 Second Amendment to Office Lease and Lease datedMay 17, 2010 by and between Revance Therapeutics, Inc.and BMR-Gateway Boulevard LLC S-1 333-193154 10.11 December 31, 2013 10.14 Third Amendment to Lease, dated February 26, 2014 by andbetween Revance Therapeutics, Inc. and BMR-GatewayBoulevard LLC 8-K 001-36297 10.35 March 4, 2014 Table of Contents10.15+ License and Service Agreement dated February 8, 2007between Revance Therapeutics, Inc. and List BiologicalLaboratories, Inc. S-1 333-193154 10.15 December 31, 2013 10.16+ First Addendum to the License and Service Agreement datedApril 21, 2009 between Revance Therapeutics, Inc. and ListBiological Laboratories, Inc. S-1 333-193154 10.16 December 31, 2013 10.17+ Development, Manufacturing and Supply Agreement datedApril 30, 2010 between Revance Therapeutics, Inc. andDuoject Medical Systems Inc. S-1 333-193154 10.17 December 31, 2013 10.18+ First Amendment to Development, Manufacturing andSupply Agreement dated April 30, 2010 between RevanceTherapeutics, Inc. and Duoject Medical Systems Inc. 10-Q 001-36297 10.4 May 14, 2015 10.19+ Development and Supply Agreement dated December 11,2009 between Revance Therapeutics, Inc. and HospiraWorldwide, Inc. S-1 333-193154 10.18 December 31, 2013 10.20+ First Amendment to Development and Supply Agreementdated May 29, 2013 between Revance Therapeutics, Inc. andHospira Worldwide, Inc S-1 333-193154 10.2 December 31, 2013 10.21+ Second Amendment to Development and Supply Agreementdated August 31, 2015 between Revance Therapeutics, Inc.and Hospira Worldwide, Inc. 10-Q 001-36297 10.1 November 10, 2015 10.22+ Manufacture and Development Agreement dated May 20,2013 between Revance Therapeutics, Inc. and AmericanPeptide Company, Inc. S-1 333-193154 10.19 December 31, 2013 10.23 Loan and Lease Agreement dated as of December 20, 2013by and between Revance Therapeutics, Inc. and EssexCapital Corporation S-1 333-193154 10.21 December 31, 2013 10.24 First Amendment to Loan and Lease Agreement, datedDecember 17, 2014, by and between Revance Therapeutics,Inc. and Essex Capital Corporation 8-K 001-36297 10.1 December 22, 2014 10.25 Second Amendment to Loan and Lease Agreement, datedFebruary 26, 2015, by and between Revance Therapeutics,Inc. and Essex Capital Corporation 10-Q 001-36297 10.4 May 14, 2015 10.26* Revance Therapeutics, Inc. Amended and RestatedExecutive Severance Benefit Plan 8-K 333-193154 10.1 May 13, 2015 10.27* Revance Therapeutics, Inc. Amended and Restated Non-Employee Director Compensation Policy X10.28* Revance Therapeutics, Inc. 2016 Management Bonus Plan X10.29* Revance Therapeutics, Inc. Amended and Restated 2014Inducement Plan 8-K 001-36297 99.1 December 14, 2015 10.30* Form of Stock Option Agreement and Grant Notice underAmended and Restated Revance Therapeutics, Inc. 2014Inducement Plan 10-Q 001-36297 10.5 November 10, 2015 Table of Contents10.31* Form of Restricted Stock Agreement and Grant Noticeunder Amended and RestatedRevance Therapeutics, Inc. 2014 Inducement Plan X10.32* Executive Employment Agreement dated December 30,2013 by and between Revance Therapeutics, Inc. and L.Daniel Browne S-1/A 333-193154 10.25 January 27, 2014 10.33* Executive Employment Agreement dated December 31,2013 by and between Revance Therapeutics, Inc. andLauren Silvernail S-1/A 333-193154 10.27 January 27, 2014 10.34* Executive Employment Agreement dated December 14,2015 by and between Revance Therapeutics, Inc. andAbhay Joshi. X21.1 List of Subsidiaries of the Registrant X23.1 Consent of Independent Registered Public Accounting Firm X24.1 Power of Attorney (contained in the signature page to thisAnnual Report on Form 10-K) X31.1 Certification of Principal Executive Officer pursuant toRule 13a-14(a) and 15d-14(a) promulgated under theExchange Act X31.2 Certification of Principal Financial Officer pursuant to Rule13a-14(a) and 15d-14(a) promulgated under the ExchangeAct X32.1† Certification of the Chief Executive Officer pursuantto18 U.S.C. Section 1350 as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002. X32.2† Certification of the Chief Financial Officer pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002 X101.INS** XBRL Instance Document X101.SCH** XBRL Taxonomy Extension Schema Document X101.CAL** XBRL Taxonomy Extension Calculation LinkbaseDocument X101.DEF** XBRL Taxonomy Extension Definition LinkbaseDocument X101.LAB** XBRL Taxonomy Extension Labels Linkbase Document X101.PRE** XBRL Taxonomy Extension Presentation LinkbaseDocument X*Indicates a management contract or compensatory plan or arrangement.+Confidential treatment has been granted for portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.†The certifications attached as Exhibit 32.1 and 32.2 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and ExchangeCommission and are not to be incorporated by reference into any filing of Revance Therapeutics, Inc. under the Securities Act of 1933, as amended, or the SecuritiesExchange Act of 1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in suchfiling.**Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement orprospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject toliability under these sections.Exhibit 10.6R EVANCE T HERAPEUTICS , I NC .R ESTRICTED S TOCK U NIT G RANT N OTICE(2014 E QUITY I NCENTIVE P LAN )Revance Therapeutics, Inc. (the “ Company ”), pursuant to Section 6(b) of the Company’s 2014 Equity Incentive Plan (the “ Plan ”), hereby awards to Participant aRestricted Stock Unit Award for the number of shares of the Company’s Common Stock (“ Restricted Stock Units ”) set forth below (the “ Award ”). The Award is subjectto all of the terms and conditions as set forth in this notice of grant (this “ Restricted Stock Unit Grant Notice ”) and in the Plan and the Restricted Stock Unit AwardAgreement (the “ Award Agreement ”), both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein shallhave the meanings set forth in the Plan or the Award Agreement. In the event of any conflict between the terms in the Award and the Plan, the terms of the Plan shallcontrol. Participant: ID: Date of Grant: Grant Number: Vesting Commencement Date: 15th day of the calendar month immediately following the month in which this Award is granted Number of Restricted Stock Units/Shares: Vesting Schedule: Issuance Schedule: Subject to any change on a Capitalization Adjustment, one share of Common Stock will be issued for each Restricted Stock Unitthat vests at the time set forth in Section 6 of the Award Agreement.Vesting Acceleration: Notwithstanding the foregoing, upon the termination without Cause (as such term is defined in the Company’s Employee Equity Vesting Policy) bythe Company (or a successor, if appropriate) of Participant’s service as an Employee in connection with or within twelve (12) months following the consummation of aChange in Control, the vesting of this Award shall accelerate in full, effective upon such termination of employment. In the event of a Change in Control, if the Company’ssuccessor does not agree to assume this Award, or to substitute an equivalent award or right for this Award, then the vesting of this Award shall accelerate in full, effectiveimmediately prior to the consummation of such Change in Control.Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock Unit Grant Notice, the Award Agreementand the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Unit Grant Notice, the Award Agreement and the Plan set forth the entireunderstanding between Participant and the Company regarding the acquisition of the Common Stock pursuant to the Award specified above and supersede all prior oral andwritten agreements on the terms of this Award with the exception, if applicable, of (i) the written employment agreement or offer letter agreement entered into between theCompany and Participant specifying the terms that should govern this specific Award, and (ii) any compensation recovery policy that is adopted by the Company or isotherwise required by applicable law.By accepting this Award, Participant acknowledges having received and read the Restricted Stock Unit Grant Notice, the Award Agreement and the Plan and agrees to all ofthe terms and conditions set forth in these documents. Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-lineor electronic system established and maintained by the Company or another third party designated by the Company. 1.R EVANCE T HERAPEUTICS , I NC . By: Signature Title: Date: 2.REVANCE THERAPEUTICS, INC.2014 EQUITY INCENTIVE PLANRESTRICTED STOCK UNIT AWARD AGREEMENTPursuant to the Restricted Stock Unit Grant Notice (the “ Grant Notice ”) and this Restricted Stock Unit Award Agreement (the “Agreement ”), Revance Therapeutics, Inc. (the “ Company ”) has awarded you (“ Participant ”) a Restricted Stock Unit Award (the “Award ”) pursuant to Section 6(b) of the Company’s 2014 Equity Incentive Plan (the “ Plan ”) for the number of Restricted StockUnits/shares indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement or the Grant Notice shall have thesame meanings given to them in the Plan. The terms of your Award, in addition to those set forth in the Grant Notice, are as follows.1. GRANT OF THE AWARD. This Award represents the right to be issued on a future date one (1) share of CommonStock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any adjustment under Section 3 below) asindicated in the Grant Notice. As of the Date of Grant, the Company will credit to a bookkeeping account maintained by the Company foryour benefit (the “ Account ”) the number of Restricted Stock Units/shares of Common Stock subject to the Award. This Award wasgranted in consideration of your services to the Company.2. VESTING. Subject to the limitations contained herein, your Award will vest, if at all, in accordance with the vestingschedule provided in the Grant Notice, provided that vesting will cease upon the termination of your Continuous Service. Upon suchtermination of your Continuous Service, the Restricted Stock Units/shares of Common Stock credited to the Account that were not vestedon the date of such termination will be forfeited at no cost to the Company and you will have no further right, title or interest in or to suchunderlying shares of Common Stock.3. NUMBER OF SHARES. The number of Restricted Stock Units/shares subject to your Award may be adjusted from timeto time for Capitalization Adjustments, as provided in the Plan. Any additional Restricted Stock Units, shares, cash or other property thatbecomes subject to the Award pursuant to this Section 3, if any, shall be subject, in a manner determined by the Board, to the sameforfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units andshares covered by your Award. Notwithstanding the provisions of this Section 3, no fractional shares or rights for fractional shares ofCommon Stock shall be created pursuant to this Section 3. Any fraction of a share will be rounded down to the nearest whole share.4. SECURITIES LAW COMPLIANCE . You may not be issued any Common Stock under your Award unless the sharesof Common Stock underlying the Restricted Stock Units are either (i) then registered under the Securities Act, or (ii) the Company hasdetermined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award must also complywith other applicable laws and regulations governing the Award, and you shall not receive such Common Stock if the Company determinesthat such receipt would not be in material compliance with such laws and regulations.1.5. TRANSFER RESTRICTIONS . Prior to the time that shares of Common Stock have been delivered to you, you may nottransfer, pledge, sell or otherwise dispose of this Award or the shares issuable in respect of your Award, except as expressly provided in thisSection 5. For example, you may not use shares that may be issued in respect of your Restricted Stock Units as security for a loan. Therestrictions on transfer set forth herein will lapse upon delivery to you of shares in respect of your vested Restricted Stock Units.(a) Death . Your Award is transferable by will and by the laws of descent and distribution. At your death, vesting ofyour Award will cease and your executor or administrator of your estate shall be entitled to receive, on behalf of your estate, any CommonStock or other consideration that vested but was not issued before your death.(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee,and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transferyour right to receive the distribution of Common Stock or other consideration hereunder, pursuant to a domestic relations order or maritalsettlement agreement that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss theproposed terms of any division of this Award with the Company General Counsel prior to finalizing the domestic relations order or maritalsettlement agreement to verify that you may make such transfer, and if so, to help ensure the required information is contained within thedomestic relations order or marital settlement agreement.6. DATE OF ISSUANCE.(a) The issuance of shares in respect of the Restricted Stock Units is intended to comply with Treasury RegulationsSection 1.409A-1(b)(4) and will be construed and administered in such a manner. Subject to the satisfaction of the withholding obligationsset forth in this Agreement, in the event one or more Restricted Stock Units vests, the Company shall issue to you one (1) share of CommonStock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any adjustment under Section 3 above). Theissuance date determined by this paragraph is referred to as the “ Original Issuance Date ”.(b) If the Original Issuance Date falls on a date that is not a business day, delivery shall instead occur on the nextfollowing business day. In addition, if:(i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, asdetermined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a datewhen you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market, and(ii) either (1) Withholding Taxes do not apply, or (2) the Company decides, prior to the Original IssuanceDate, (A) not to satisfy the Withholding Taxes by withholding shares of Common Stock from the shares otherwise due, on the OriginalIssuance Date, to you under this Award, and (B) not to permit you to pay your Withholding Taxes in cash, then the shares that wouldotherwise be issued to you on the Original Issuance Date will not be delivered on such Original Issuance Date and will instead be deliveredon the first business day when you are not2.prohibited from selling shares of the Company’s Common Stock in the open public market, but in no event later than December 31 of thecalendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Dateoccurs), or, if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date thatis the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this Awardare no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).(c) The form of delivery ( e.g. , a stock certificate or electronic entry evidencing such shares) shall be determined by theCompany.7. DIVIDENDS. You shall receive no benefit or adjustment to your Award with respect to any cash dividend, stock dividendor other distribution that does not result from a Capitalization Adjustment.8. RESTRICTIVE LEGENDS. The shares of Common Stock issued under your Award shall be endorsed with appropriatelegends as determined by the Company.9. EXECUTION OF DOCUMENTS. You hereby acknowledge and agree that the manner selected by the Company bywhich you indicate your consent to your Grant Notice is also deemed to be your execution of your Grant Notice and of this Agreement. Youfurther agree that such manner of indicating consent may be relied upon as your signature for establishing your execution of any documentsto be executed in the future in connection with your Award.10. AWARD NOT A SERVICE CONTRACT .(a) Nothing in this Agreement (including, but not limited to, the vesting of your Award or the issuance of the sharessubject to your Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Planshall: (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any promiseor commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, futurecompensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Planunless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right toterminate you at will and without regard to any future vesting opportunity that you may have.(b) The Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses orAffiliates at any time or from time to time, as it deems appropriate (a “ reorganization ”). Such a reorganization could result in thetermination of your Continuous Service, or the termination of Affiliate status of your employer and the loss of benefits available to youunder this Agreement, including but not limited to, the termination of the right to continue vesting in the Award. This Agreement, the Plan,the transactions contemplated hereunder and the vesting schedule set forth herein or any covenant of good faith and fair dealing that may befound implicit in any of them do not constitute an express or implied promise of continued3.engagement as an employee or consultant for the term of this Agreement, for any period, or at all, and shall not interfere in any way with theCompany’s right to conduct a reorganization.11. WITHHOLDING OBLIGATIONS.(a) On each vesting date, and on or before the time you receive a distribution of the shares underlying your RestrictedStock Units, and at any other time as reasonably requested by the Company in accordance with applicable tax laws, you hereby authorizeany required withholding from the Common Stock issuable to you and/or otherwise agree to make adequate provision in cash for any sumsrequired to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate that arise in connectionwith your Award (the “ Withholding Taxes ”). Additionally, the Company or any Affiliate may, in its sole discretion, satisfy all or anyportion of the Withholding Taxes obligation relating to your Award by any of the following means or by a combination of such means: (i)withholding from any compensation otherwise payable to you by the Company; (ii) causing you to tender a cash payment; (iii) permitting orrequiring you to enter into a “same day sale” commitment, if applicable, with a broker-dealer that is a member of the Financial IndustryRegulatory Authority (a “ FINRA Dealer ”) whereby you irrevocably elect to sell a portion of the shares to be delivered in connection withyour Restricted Stock Units to satisfy the Withholding Taxes and whereby the FINRA Dealer irrevocably commits to forward the proceedsnecessary to satisfy the Withholding Taxes directly to the Company and/or its Affiliates; or (iv) withholding shares of Common Stock fromthe shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured as ofthe date shares of Common Stock are issued to pursuant to Section 6) equal to the amount of such Withholding Taxes; provided , however ,that the number of such shares of Common Stock so withheld will not exceed the amount necessary to satisfy the Company’s required taxwithholding obligations using the minimum statutory withholding rates for federal, state, local and foreign tax purposes, including payrolltaxes, that are applicable to supplemental taxable income; and provided , further, that to the extent necessary to qualify for an exemptionfrom application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express priorapproval of the Company’s Compensation Committee.(b) Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have noobligation to deliver to you any Common Stock.(c) In the event the Company’s obligation to withhold arises prior to the delivery to you of Common Stock or it isdetermined after the delivery of Common Stock to you that the amount of the Company’s withholding obligation was greater than theamount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withholdthe proper amount.12. TAX CONSEQUENCES. The Company has no duty or obligation to minimize the tax consequences to you of thisAward and shall not be liable to you for any adverse tax consequences to you arising in connection with this Award. You are hereby advisedto consult with your own personal tax, financial and/or legal advisors regarding the tax consequences of this Award and by signing theGrant Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so. You understand that you (and not theCompany) shall be responsible for your4.own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.13. UNSECURED OBLIGATION. Your Award is unfunded, and as a holder of a vested Award, you shall be considered anunsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares or other property pursuant to thisAgreement. You shall not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuantto this Agreement until such shares are issued to you pursuant to Section 6 of this Agreement. Upon such issuance, you will obtain fullvoting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to itsprovisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any otherperson.14. NOTICES . Any notice or request required or permitted hereunder shall be given in writing to each of the other partieshereto and shall be deemed effectively given on the earlier of (i) the date of personal delivery, including delivery by express courier, ordelivery via electronic means, or (ii) the date that is five (5) days after deposit in the United States Post Office (whether or not actuallyreceived by the addressee), by registered or certified mail with postage and fees prepaid, addressed at the following addresses, or at suchother address(es) as a party may designate by ten (10) days’ advance written notice to each of the other parties hereto:COMPANY: Revance Therapeutics, Inc. Attn: Stock Administrator 7555 Gateway Boulevard Newark, CA 94560 PARTICIPANT: Your address as on file with the Company at the time notice is given 15. HEADINGS . The headings of the Sections in this Agreement are inserted for convenience only and shall not be deemedto constitute a part of this Agreement or to affect the meaning of this Agreement.16. MISCELLANEOUS .(a) The rights and obligations of the Company under your Award shall be transferable by the Company to any one or morepersons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by, the Company’ssuccessors and assigns.(b) You agree upon request to execute any further documents or instruments necessary or desirable in the soledetermination of the Company to carry out the purposes or intent of your Award.5.(c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain theadvice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award.(d) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by anygovernmental agencies or national securities exchanges as may be required.(e) All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company,whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all orsubstantially all of the business and/or assets of the Company.17. GOVERNING PLAN DOCUMENT . Your Award is subject to all the provisions of the Plan, the provisions of whichare hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from timeto time be promulgated and adopted pursuant to the Plan. Your Award (and any compensation paid or shares issued under your Award) issubject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementingregulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required byapplicable law. No recovery of compensation under such a clawback policy will be an event giving rise to a right to voluntarily terminateemployment upon a resignation for “good reason,” or for a “constructive termination” or any similar term under any plan of or agreementwith the Company.18. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to this Agreement shall notbe included as compensation, earnings, salaries, or other similar terms used when calculating benefits under any employee benefit plan(other than the Plan) sponsored by the Company or any Affiliate except as such plan otherwise expressly provides. The Company expresslyreserves its rights to amend, modify, or terminate any or all of the employee benefit plans of the Company or any Affiliate.19. CHOICE OF LAW. The interpretation, performance and enforcement of this Agreement shall be governed by the lawof the State of Delaware without regard to that state’s conflicts of laws rules.20. SEVERABILITY . If all or any part of this Agreement or the Plan is declared by any court or governmental authority tobe unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to beunlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, beconstrued in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaininglawful and valid.21. OTHER DOCUMENTS . You hereby acknowledge receipt or the right to receive a document providing the informationrequired by Rule 428(b)(1) promulgated under the Securities Act. In addition, you acknowledge receipt of the Company’s Insider Tradingand Trading Window Policy .6.22. AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing,signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amendedsolely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment isdelivered to you, and provided that, except as otherwise expressly provided in the Plan, no such amendment materially adversely affectingyour rights hereunder may be made without your written consent. Without limiting the foregoing, the Board reserves the right to change, bywritten notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the Awardas a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any suchchange shall be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.23. COMPLIANCE WITH SECTION 409A OF THE CODE . This Award is intended to comply with the “short-termdeferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4). Notwithstanding the foregoing, if it is determined that the Awardfails to satisfy the requirements of the short-term deferral rule and is otherwise deferred compensation subject to Section 409A, and if youare a “Specified Employee” (within the meaning set forth in Section 409A(a)(2)(B)(i) of the Code) as of the date of your “separation fromservice” (within the meaning of Treasury Regulation Section 1.409A-1(h) and without regard to any alternative definition thereunder), thenthe issuance of any shares that would otherwise be made upon the date of the separation from service or within the first six (6) monthsthereafter will not be made on the originally scheduled date(s) and will instead be issued in a lump sum on the date that is six (6) monthsand one day after the date of the separation from service, with the balance of the shares issued thereafter in accordance with the originalvesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the impositionof adverse taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is intended toconstitute a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2).* * * * *This Restricted Stock Unit Award Agreement shall be deemed to be signed by the Company and the Participant upon the acceptanceby the Participant of the Restricted Stock Unit Grant Notice.7.Exhibit 10.8R EVANCE T HERAPEUTICS , I NC .R ESTRICTED S TOCK B ONUS G RANT N OTICE(2014 E QUITY I NCENTIVE P LAN )Revance Therapeutics, Inc. (the “ Company ”), pursuant to its 2014 Equity Incentive Plan (the “ Plan ”), hereby awards to Participant as a bonus the number of shares of theCompany’s Common Stock set forth below (“ Award ”). This Award is subject to all of the terms and conditions as set forth herein and in the Restricted Stock BonusAgreement, the Plan, the form of Assignment Separate from Certificate and the form of Joint Escrow Instructions, all of which are attached hereto and incorporated hereinin their entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or the Restricted Stock Bonus Agreement. In the event of anyconflict between the terms in the Award and the Plan, the terms of the Plan shall control. Participant: Date of Grant: Vesting Commencement Date: 15th day of the calendar month immediately following the month in which this Award is granted Number of Shares Subject to Award: Consideration: Participant’s Services Vesting Schedule :Vesting Acceleration: Notwithstanding the foregoing, upon the termination without Cause (as such term is defined in the Company’s Employee Equity Vesting Policy) bythe Company (or a successor, if appropriate) of Participant’s service as an Employee in connection with or within twelve (12) months following the consummation of aChange in Control, the vesting of this Award shall accelerate in full, effective upon such termination of employment. In the event of a Change in Control, if the Company’ssuccessor does not agree to assume this Award, or to substitute an equivalent award or right for this Award, then the vesting of this Award shall accelerate in full, effectiveimmediately prior to the consummation of such Change in Control.Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock Bonus Grant Notice,the Restricted Stock Bonus Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Bonus Grant Notice, the RestrictedStock Bonus Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of the Common Stock pursuant tothe Award specified above and supersede all prior oral and written agreements on that subject with the exception, if applicable, of (i) the written employment agreement oroffer letter agreement entered into between the Company and Participant specifying the terms that should govern this specific Award, and (ii) any compensation recoverypolicy that is adopted by the Company or is otherwise required by applicable law.Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained bythe Company or another third party designated by the Company. 1. 123768225 v2 R EVANCE T HERAPEUTICS , I NC . By: Signature Title: Date: 2. 123768225 v2REVANCE THERAPEUTICS, INC.2014 EQUITY INCENTIVE PLANRESTRICTED STOCK BONUS AGREEMENTPursuant to the Restricted Stock Bonus Grant Notice (“ Grant Notice ”) and this Restricted Stock Bonus Agreement (collectively,the “ Award ”) and in consideration of your services, Revance Therapeutics, Inc. (the “ Company ”) has awarded you (“ Participant ”) astock bonus under its 2014 Equity Incentive Plan (the “ Plan ”) for the number of shares of the Company’s Common Stock subject to theAward as indicated in the Grant Notice. Capitalized terms not explicitly defined in this Restricted Stock Bonus Agreement but defined inthe Plan shall have the same definitions as in the Plan. The details of your Award, in addition to those set forth in the Grant Notice and thePlan, are as follows.The details of your Award are as follows:1. VESTING. Subject to the limitations contained herein, your Award will vest as provided in the Grant Notice, providedthat vesting will cease upon the termination of your Continuous Service.2. NUMBER OF SHARES. The number of shares subject to your Award may be adjusted from time to time for CapitalizationAdjustments, as provided in the Plan.3. SECURITIES LAW COMPLIANCE. You may not be issued any shares under your Award unless the shares are either (i)then registered under the Securities Act or (ii) the Company has determined that such issuance would be exempt from the registrationrequirements of the Securities Act. Your Award must also comply with other applicable laws and regulations governing the Award, and youwill not receive such shares if the Company determines that such receipt would not be in material compliance with such laws andregulations.4. RIGHT OF REACQUISITION.(a) The Company shall have the right to reacquire all or any part of the shares received pursuant to your Award (a “Reacquisition Right ”) as to the shares you received pursuant to your Award that have not as yet vested in accordance with the VestingSchedule on the Grant Notice (“ Unvested Shares ”) on the following terms and conditions:(i) The Company, shall simultaneously with termination of your Continuous Service automatically reacquire for noconsideration (that is, for zero dollars ($0)) all of the Unvested Shares, unless the Company agrees to waive its Reacquisition Right as tosome or all of the Unvested Shares. Any such waiver shall be exercised by the Company by written notice to you or your representative(with a copy to the Escrow Holder as defined below) within ninety (90) days after the termination of your Continuous Service, and theEscrow Holder may then release to you the number of Unvested Shares not being reacquired by the Company. If the Company does notwaive its Reacquisition Right as to all of the Unvested Shares, then upon such termination of1. 123768225 v2your Continuous Service, the Escrow Holder shall transfer to the Company the number of shares the Company is reacquiring.(ii) The shares issued under your Award shall be held in escrow pursuant to the terms of the Joint EscrowInstructions attached to the Grant Notice as Attachment IV. You agree to execute two (2) Assignment Separate From Certificate forms (withdate and number of shares blank) substantially in the form attached to the Grant Notice as Attachment III and deliver the same, along withthe certificate or certificates evidencing the shares, for use by the escrow agent pursuant to the terms of the Joint Escrow Instructions.(iii) Subject to the provisions of your Award, you shall, during the term of your Award, exercise all rights andprivileges of a stockholder of the Company with respect to the shares deposited in escrow. You shall be deemed to be the holder of theshares for purposes of receiving any dividends which may be paid with respect to such shares (which shall be subject to the same vestingand forfeiture restrictions as apply to the shares to which they relate) and for purposes of exercising any voting rights relating to such shares,even if some or all of such shares have not yet vested and been released from the Company’s Reacquisition Right.(iv) If, from time to time, there is any stock dividend, stock split or other change in the character or amount of anyof the outstanding stock of the corporation the stock of which is subject to the provisions of your Award, then in such event any and all new,substituted or additional securities to which you are entitled by reason of your ownership of the shares acquired under your Award shall beimmediately subject to the Reacquisition Right with the same force and effect as the shares subject to this Reacquisition Right immediatelybefore such event.(v) In addition to any other limitation on transfer created by applicable securities laws, you shall not sell, assign,hypothecate, donate, encumber, or otherwise dispose of any interest in the Common Stock while such shares of Common Stock are subjectto the Reacquisition Right or continue to be held in the Joint Escrow; provided, however, that an interest in such shares may be transferredpursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act.5. RESTRICTIVE LEGENDS. The shares issued under your Award shall be endorsed with appropriate legends determined bythe Company.6. AWARD NOT A SERVICE CONTRACT. Your Award is not an employment or service contract, and nothing in yourAward shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or anAffiliate, or on the part of the Company or an Affiliate to continue your employment. In addition, nothing in your Award shall obligate theCompany or an Affiliate, their respective stockholders, boards of directors, Officers or Employees to continue any relationship that youmight have as a Director or Consultant for the Company or an Affiliate.2. 123768225 v27. WITHHOLDING OBLIGATIONS.(a) At the time your Award is made, or at any time thereafter as requested by the Company, you hereby authorizewithholding from payroll and any amounts payable to you, and otherwise agree to make adequate provision for any sums required to satisfythe federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with yourAward.(b) Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have noobligation to issue a certificate for such shares or release such shares from any escrow provided for herein.8. TAX CONSEQUENCES. The acquisition and vesting of the shares may have adverse tax consequences to you that mayavoided or mitigated by filing an election under Section 83(b) of the Code. Such election must be filed within thirty (30) days after the dateof your Award. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE ATIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF YOU REQUEST THE COMPANY TO MAKE THE FILING ONYOUR BEHALF.9. NOTICES. Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively givenupon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postageprepaid, addressed to you at the last address you provided to the Company.10. MISCELLANEOUS.(a) The rights and obligations of the Company under your Award shall be transferable to any one or more persons orentities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors andassigns. Your rights and obligations under your Award may only be assigned with the prior written consent of the Board in its solediscretion.(b) You agree upon request to execute any further documents or instruments necessary or desirable in the soledetermination of the Company to carry out the purposes or intent of your Award.(c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain theadvice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award.11. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which arehereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time totime be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award and those of thePlan, the provisions of the Plan shall control.3. 123768225 v2*****This Restricted Stock Bonus Agreement shall be deemed to be signed by the Company and Participant upon the acceptance by theParticipant of the Restricted Stock Bonus Grant Notice.4. 123768225 v2JOINT ESCROW INSTRUCTIONS[Date]Corporate SecretaryRevance Therapeutics, Inc.7555 Gateway BoulevardNewark, California 94560Dear Sir/Madam:As Escrow Agent for both Revance Therapeutics, Inc., a Delaware corporation (the “ Company ”), and the undersigned recipient ofstock of the Company (“ Recipient ”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the termsof that certain Restricted Stock Bonus Grant Notice (the “ Grant Notice ”), dated _______________ to which a copy of these Joint EscrowInstructions is attached as Attachment IV, and pursuant to the terms of that certain Restricted Stock Bonus Agreement (“ Agreement ”),which is Attachment I to the Grant Notice, in accordance with the following instructions. Capitalized terms not explicitly defined in theseinstructions but defined in the Company’s 2014 Equity Incentive Plan (“ Plan ”), the Grant Notice, or the Agreement shall have the samedefinitions as provided therein.1. In the event Recipient ceases to render services to the Company or an affiliate of the Company during the vesting period setforth in the Grant Notice, the Company or its assignee will give to Recipient and you a written notice specifying that the shares of CommonStock shall be transferred to the Company. Recipient and the Company hereby irrevocably authorize and direct you to close the transactioncontemplated by such notice in accordance with the terms of said notice.2. At the closing you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the numberof shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of Common Stock to be transferred,to the Company.3. Recipient irrevocably authorizes the Company to deposit with you any certificates evidencing shares of Common Stock to beheld by you hereunder and any additions and substitutions to said shares as specified in the Grant Notice. Recipient does hereby irrevocablyconstitute and appoint you as Recipient’s attorney‑in‑fact and agent for the term of this escrow to execute with respect to such securitiesand other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securitiesnegotiable and complete any transaction herein contemplated.4. This escrow shall terminate upon vesting of the shares or upon the earlier return of the shares to the Company pursuant to theCompany’s Reacquisition Right or other forfeiture condition under the Plan.1. 123768225 v25. If at the time of termination of this escrow you should have in your possession any documents, securities, or other propertybelonging to Recipient, you shall deliver all of same to any pledgee entitled thereto or, if none, to Recipient and shall be discharged of allfurther obligations hereunder.6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall beprotected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed orpresented by the proper party or parties or their assignees. You shall not be personally liable for any act you may do or omit to do hereunderas Escrow Agent or as attorney‑in‑fact for Recipient while acting in good faith and any act done or omitted by you pursuant to the advice ofyour own attorneys shall be conclusive evidence of such good faith.8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other personor corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders,judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you shall not be liableto any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order,judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.9. You shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering orpurporting to execute or deliver the Grant Notice or any documents or papers deposited or called for hereunder.10. You shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint EscrowInstructions or any documents deposited with you.11. You shall be entitled to employ such legal counsel, including but not limited to Cooley LLP, and other experts as you maydeem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and maypay such counsel reasonable compensation therefor.12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be Secretary of the Company or if youshall resign by written notice to each party. In the event of any such termination, the Company may appoint any officer or assistant officerof the Company as successor Escrow Agent and Recipient hereby confirms the appointment of such successor or successors as hisattorney‑in‑fact and agent to the full extent of your appointment.13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations inrespect hereto, the necessary parties hereto shall join in furnishing such instruments.2. 123768225 v214. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession ofthe securities, you may (but are not obligated to) retain in your possession without liability to anyone all or any part of said securities untilsuch dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of acourt of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no dutywhatsoever to institute or defend any such proceedings.15. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personaldelivery or upon deposit in any United States Post Box, by registered or certified mail with postage and fees prepaid, addressed to each ofthe other parties hereunto entitled at the following addresses, or at such other addresses as a party may designate by ten (10) days’ writtennotice to each of the other parties hereto:COMPANY:Revance Therapeutics, Inc 7555 Gateway Boulevard Newark, California 94560 Attn: [General Counsel] RECIPIENT:_________________________________ _________________________________ _________________________________ _________________________________ ESCROW AGENT:Revance Therapeutics, Inc 7555 Gateway Boulevard Newark, California 94560 Attn: Corporate Secretary16. By signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions;you do not become a party to the Grant Notice.17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors andpermitted assigns. It is understood and agreed that references to “you” or “your” herein refer to the original Escrow Agent and to any and allsuccessor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under theGrant Notice and these Joint Escrow Instructions in whole or in part.18. This Agreement shall be governed by and interpreted and determined in accordance with the laws of the State of California, assuch laws are applied by California courts to contracts made and to be performed entirely in California by residents of that state.3. 123768225 v2 Very truly yours, REVANCE THERAPEUTICS, INC By: RECIPIENT ______________________________________________________ Name:____________________________________________ ESCROW AGRENT: ____________________________________ 4. 123768225 v2ASSIGNMENT SEPARATE FROM CERTIFICATEFOR VALUE RECEIVED and pursuant to that certain Restricted Stock Bonus Grant Notice and Restricted Stock BonusAgreement (the “ Award ”), [Participant’s Name] hereby sells, assigns and transfers unto Revance Therapeutics, Inc., a Delawarecorporation (“ Assignee ”) ________________________ (__________) shares of the common stock of the Assignee, standing in theundersigned’s name on the books of said corporation represented by Certificate No. _____ herewith and do hereby irrevocably constituteand appoint _____________________ as attorney-in-fact to transfer the said stock on the books of the within named Company with fullpower of substitution in the premises. This Assignment may be used only in accordance with and subject to the terms and conditions of theAward, in connection with the reacquisition of shares of Common Stock of the Corporation issued to the undersigned pursuant to theAward, and only to the extent that such shares remain subject to the Corporation’s Reacquisition Right under the Award.Dated:___________________________ Signatures:_________________________________________ [Participant's Name], Recipient[INSTRUCTION: Please do not fill in any blanks other than the signature line. The purpose of this Assignment is to enable the Companyto exercise its Reacquisition Right set forth in the Award without requiring additional signatures on your part. ] 123768225 v2Exhibit 10.27REVANCE THERAPEUTICS, INC.AMENDED AND RESTATEDNON-EMPLOYEE DIRECTOR COMPENSATION POLICYEach member of the Board of Directors (the “Board” ) who is not also serving as an employee of Revance Therapeutics, Inc. (the“Company” ) or any of its subsidiaries (each such member, an “Eligible Director” ) will receive the compensation described in thisAmended and Restated Non-Employee Director Compensation Policy for his or her Board service. This policy is effective as of January 1,2016 (the “ Effective Date ”) and may be amended at any time in the sole discretion of the Board.Annual Cash CompensationThe annual cash compensation amount set forth below is payable in equal quarterly installments, payable in arrears on the last day of eachfiscal quarter in which the service occurred. If an Eligible Director joins the Board or a committee of the Board at a time other than effectiveas of the first day of a fiscal quarter, each annual retainer set forth below will be pro-rated based on days served in the applicable fiscal year,with the pro-rated amount paid for the first fiscal quarter in which the Eligible Director provides the service, and regular full quarterlypayments thereafter. All annual cash fees are vested upon payment.1.Annual Board Service Retainer :a. All Eligible Directors: $39,500b. Chairman of the Board Service Retainer (including Eligible Director Service Retainer): $74,0002. Annual Committee Member Service Retainer :a. Member of the Audit Committee: $7,500b. Member of the Compensation Committee: $5,000c. Member of the Nominating & Governance Committee: $4,500d. Member of the Science & Technology Committee: $5,0003.Annual Committee Chair Service Retainer (including Committee Member Service Retainer) :a. Chairman of the Audit Committee: $20,000b. Chairman of the Compensation Committee: $12,250c. Chairman of the Nominating & Governance Committee: $8,000d. Chairman of the Science & Technology Committee: $12,250Equity CompensationThe equity compensation set forth below will be granted under the Revance Therapeutics, Inc. 2014 Equity Incentive Plan (the “Plan” ),and will be documented on the applicable form of stock option agreement most recently approved for use by the Board (or a duly authorizedcommittee thereof) for Eligible Directors. All stock options granted under this policy will be nonstatutory stock options, with an exerciseprice per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Common Stock on the date of grant, and aterm of ten years from the date of grant (subject to earlier termination in connection with a termination of service as provided in the Plan).1. Initial Option Grant : On the date of the Eligible Director’s initial election to the Board, for each Eligible Director who is first electedto the Board following the Effective Date (or, if such date is not a1. 125766038 v2market trading day, the first market trading day thereafter), the Eligible Director will be automatically, and without further action by theBoard or Compensation Committee of the Board, granted a stock option for 18,000 shares (an “ Initial Option Grant ”). The shares subjectto each Initial Option Grant will vest on the one year anniversary of the date of grant, subject to the Eligible Director’s Continuous Service(as defined in the Plan) through each such vesting date.2. Annual Option Grant : On the date of each Company’s annual stockholder meeting held after the Effective Date, each Eligible Directorwho continues to serve as a non-employee member of the Board will be automatically, and without further action by the Board orCompensation Committee of the Board, granted a stock option for 8,000 shares (an “ Annual Option Grant ”). The shares subject to theAnnual Option Grant will vest on the one year anniversary of the date of grant, subject to the Eligible Director’s Continuous Service (asdefined in the Plan) through such vesting date.2. 125766038 v2Exhibit 10.28REVANCE THERAPEUTICS, INC.2016 MANAGEMENT BONUS PROGRAMOn February 9, 2016, the Compensation Committee of the Board of Directors of Revance Therapeutics, Inc. (the “Company”) approved the Company’s 2016 corporateobjectives, weighted for purposes of determining bonuses, if any, for the Company’s executive officers with respect to performance for fiscal year 2016 (the “2016 BonusProgram”).The 2016 Bonus Program is designed to reward, through the payment of annual cash bonuses, the Company’s executive officers for the Company’s performance in meetingkey corporate objectives and for individual performance in meeting specified corporate goals for the year.The Company’s 2016 corporate goals include the achievement of clinical development milestones for RT002 injectable for the treatment of glabellar (frown) lines andmovement disorder (45% weighting), achievement of clinical development milestones for RT001 topical for the treatment of lateral canthal (crow’s feet) lines andhyperhidrosis (35% weighting), completion of manufacturing-related objectives (10%), achievement of specified financial (5% weighting) and compliance (5% weighting)objectives.The cash bonus for all executive officers will be based on the achievement of the 2016 corporate goals (75% weighting) and his or her individual performance goals (25%weighting). The executive officers’ actual bonuses for fiscal year 2016 may exceed 100% of his or her 2016 target bonus percentage in the event performance exceeds thepredetermined goals and/or upon the achievement of other specified goals relating to clinical development.Payment of bonuses to the Company’s executive officers under the 2016 Bonus Program and the actual amount of such bonus, if any, are within the discretion of theCompensation Committee. The actual bonus awarded, if any, may be more or less than each executive’s annual target bonus.Exhibit 10.31REVANCE THERAPEUTICS, INC. 2014 INDUCEMENT PLANRESTRICTED STOCK GRANT NOTICE Revance Therapeutics, Inc. (the “ Company ”), pursuant to its 2014 Inducement Plan (the “ Plan ”), hereby awards to Participant as an inducement material to theParticipant’s entering into employment with the Company, the number of shares of the Company’s Common Stock set forth below (“ Award ”). This Award is subject to allof the terms and conditions as set forth herein and in the Restricted Stock Agreement, the Plan, the form of Assignment Separate from Certificate and the form of JointEscrow Instructions, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meanings setforth in the Plan or the Restricted Stock Agreement. In the event of any conflict between the terms in the Award and the Plan, the terms of the Plan shall control.Participant:__________________________________________________________Date of Grant:__________________________________________________________Vesting Commencement Date:15th day of the calendar month immediately following the month in which this award is grantedNumber of Shares Subject to Award__________________________________________________________ConsiderationParticipant's Future ServicesVesting Schedule : Vesting Acceleration: Notwithstanding the foregoing, upon the termination without Cause (as such term is defined in the Company’s Employee Equity Vesting Policy) bythe Company (or a successor, if appropriate) of Participant’s service as an Employee in connection with or within twelve (12) months following the consummation of aChange in Control, the vesting of this Award shall accelerate in full, effective upon such termination of employment. In the event of a Change in Control, if the Company’ssuccessor does not agree to assume this Award, or to substitute an equivalent award or right for this Award, then the vesting of this Award shall accelerate in full, effectiveimmediately prior to the consummation of such Change in Control.Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock Grant Notice, theRestricted Stock Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Grant Notice, the Restricted Stock Agreementand the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of the Common Stock pursuant to the Award specified aboveand supersede all prior oral and written agreements on that subject with the exception, if applicable, of (i) the written employment agreement or offer letter agreemententered into between the Company and Participant specifying the terms that should govern this specific Award, and (ii) any compensation recovery policy that is adopted bythe Company or is otherwise required by applicable law.Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained bythe Company or another third party designated by the Company.1. 109782575 v4REVANCE THERAPEUTICS, INC.PARTICIPANT: By:__________________________________________[Name]Signature Title:______________________________________________________________________________________ Signature Date:_________________________________________Date:_________________________________________2. 109782575 v4REVANCE THERAPEUTICS, INC.2014 INDUCEMENT PLANRESTRICTED STOCK AGREEMENTPursuant to the Restricted Stock Grant Notice (“ Grant Notice ”) and this Restricted Stock Agreement (collectively, the “ Award ”)and in consideration of your future services, Revance Therapeutics, Inc. (the “ Company ”) has awarded you (“ Participant ”) a stock awardunder its 2014 Inducement Plan (the “ Plan ”) for the number of shares of the Company’s Common Stock subject to the Award as indicatedin the Grant Notice. Capitalized terms not explicitly defined in this Restricted Stock Agreement but defined in the Plan shall have the samedefinitions as in the Plan. The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.The details of your Award are as follows:1. VESTING. Subject to the limitations contained herein, your Award will vest as provided in the Grant Notice, providedthat vesting will cease upon the termination of your Continuous Service.2. NUMBER OF SHARES. The number of shares subject to your Award may be adjusted from time to time for CapitalizationAdjustments, as provided in the Plan.3. SECURITIES LAW COMPLIANCE. You may not be issued any shares under your Award unless the shares are either (i)then registered under the Securities Act or (ii) the Company has determined that such issuance would be exempt from the registrationrequirements of the Securities Act. Your Award must also comply with other applicable laws and regulations governing the Award, and youwill not receive such shares if the Company determines that such receipt would not be in material compliance with such laws andregulations.4. RIGHT OF REACQUISITION.(a) The Company shall have the right to reacquire all or any part of the shares received pursuant to your Award (a “Reacquisition Right ”) as to the shares you received pursuant to your Award that have not as yet vested in accordance with the VestingSchedule on the Grant Notice (“ Unvested Shares ”) on the following terms and conditions:(i) The Company, shall simultaneously with termination of your Continuous Service automatically reacquire for noconsideration (that is, for zero dollars ($0)) all of the Unvested Shares, unless the Company agrees to waive its Reacquisition Right as tosome or all of the Unvested Shares. Any such waiver shall be exercised by the Company by written notice to you or your representative(with a copy to the Escrow Holder as defined below) within ninety (90) days after the termination of your Continuous Service, and theEscrow Holder may then release to you the number of Unvested Shares not being reacquired by the Company. If the Company does notwaive its Reacquisition Right as to all of the Unvested Shares, then upon such termination of3. 109782575 v4your Continuous Service, the Escrow Holder shall transfer to the Company the number of shares the Company is reacquiring.(ii) The shares issued under your Award shall be held in escrow pursuant to the terms of the Joint EscrowInstructions attached to the Grant Notice as Attachment IV. You agree to execute two (2) Assignment Separate From Certificate forms (withdate and number of shares blank) substantially in the form attached to the Grant Notice as Attachment III and deliver the same, along withthe certificate or certificates evidencing the shares, for use by the escrow agent pursuant to the terms of the Joint Escrow Instructions.(iii) Subject to the provisions of your Award, you shall, during the term of your Award, exercise all rights andprivileges of a stockholder of the Company with respect to the shares deposited in escrow. You shall be deemed to be the holder of theshares for purposes of receiving any dividends which may be paid with respect to such shares (which shall be subject to the same vestingand forfeiture restrictions as apply to the shares to which they relate) and for purposes of exercising any voting rights relating to such shares,even if some or all of such shares have not yet vested and been released from the Company’s Reacquisition Right.(iv) If, from time to time, there is any stock dividend, stock split or other change in the character or amount of anyof the outstanding stock of the corporation the stock of which is subject to the provisions of your Award, then in such event any and all new,substituted or additional securities to which you are entitled by reason of your ownership of the shares acquired under your Award shall beimmediately subject to the Reacquisition Right with the same force and effect as the shares subject to this Reacquisition Right immediatelybefore such event.(v) In addition to any other limitation on transfer created by applicable securities laws, you shall not sell, assign,hypothecate, donate, encumber, or otherwise dispose of any interest in the Common Stock while such shares of Common Stock are subjectto the Reacquisition Right or continue to be held in the Joint Escrow; provided, however, that an interest in such shares may be transferredpursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act.5. RESTRICTIVE LEGENDS. The shares issued under your Award shall be endorsed with appropriate legends determined bythe Company.6. AWARD NOT AN EMPLOYMENT CONTRACT. Your Award is not an employment or service contract, and nothing inyour Award shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or anAffiliate, or on the part of the Company or an Affiliate to continue your employment.7. WITHHOLDING OBLIGATIONS.(a) At the time your Award is made, or at any time thereafter as requested by the Company, you hereby authorizewithholding from payroll and any amounts payable to you, and otherwise agree to make adequate provision for any sums required to satisfythe federal, state, local4. 109782575 v4and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your Award.(b) Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have noobligation to issue a certificate for such shares or release such shares from any escrow provided for herein.8. TAX CONSEQUENCES. The acquisition and vesting of the shares may have adverse tax consequences to you that mayavoided or mitigated by filing an election under Section 83(b) of the Code. Such election must be filed within thirty (30) days after the dateof your Award. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE ATIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF YOU REQUEST THE COMPANY TO MAKE THE FILING ONYOUR BEHALF.9. NOTICES. Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively givenupon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postageprepaid, addressed to you at the last address you provided to the Company.10. MISCELLANEOUS.(a) The rights and obligations of the Company under your Award shall be transferable to any one or more persons orentities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors andassigns. Your rights and obligations under your Award may only be assigned with the prior written consent of the Board in its solediscretion.(b) You agree upon request to execute any further documents or instruments necessary or desirable in the soledetermination of the Company to carry out the purposes or intent of your Award.(c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain theadvice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award.11. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which arehereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time totime be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award and those of thePlan, the provisions of the Plan shall control.*****This Restricted Stock Agreement shall be deemed to be signed by the Company and Participant upon the acceptance by theParticipant of the Restricted Stock Grant Notice.5. 109782575 v4JOINT ESCROW INSTRUCTIONS[Date]Corporate SecretaryRevance Therapeutics, Inc.7555 Gateway BoulevardNewark, California 94560Dear Sir/Madam:As Escrow Agent for both Revance Therapeutics, Inc., a Delaware corporation (the “ Company ”), and the undersigned recipient ofstock of the Company (“ Recipient ”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the termsof that certain Restricted Stock Grant Notice (the “ Grant Notice ”), dated _______________ to which a copy of these Joint EscrowInstructions is attached as Attachment IV, and pursuant to the terms of that certain Restricted Stock Agreement (“ Agreement ”), which isAttachment I to the Grant Notice, in accordance with the following instructions. Capitalized terms not explicitly defined in theseinstructions but defined in the Company’s 2014 Inducement Plan (“ Plan ”), the Grant Notice, or the Agreement shall have the samedefinitions as provided therein.1. In the event Recipient ceases to render services to the Company or an affiliate of the Company during the vesting period setforth in the Grant Notice, the Company or its assignee will give to Recipient and you a written notice specifying that the shares of CommonStock shall be transferred to the Company. Recipient and the Company hereby irrevocably authorize and direct you to close the transactioncontemplated by such notice in accordance with the terms of said notice.2. At the closing you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the numberof shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of Common Stock to be transferred,to the Company.3. Recipient irrevocably authorizes the Company to deposit with you any certificates evidencing shares of Common Stock to beheld by you hereunder and any additions and substitutions to said shares as specified in the Grant Notice. Recipient does hereby irrevocablyconstitute and appoint you as Recipient’s attorney‑in‑fact and agent for the term of this escrow to execute with respect to such securitiesand other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securitiesnegotiable and complete any transaction herein contemplated.4. This escrow shall terminate upon vesting of the shares or upon the earlier return of the shares to the Company pursuant to theCompany’s Reacquisition Right or other forfeiture condition under the Plan.1. 109782575 v45. If at the time of termination of this escrow you should have in your possession any documents, securities, or other propertybelonging to Recipient, you shall deliver all of same to any pledgee entitled thereto or, if none, to Recipient and shall be discharged of allfurther obligations hereunder.6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall beprotected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed orpresented by the proper party or parties or their assignees. You shall not be personally liable for any act you may do or omit to do hereunderas Escrow Agent or as attorney‑in‑fact for Recipient while acting in good faith and any act done or omitted by you pursuant to the advice ofyour own attorneys shall be conclusive evidence of such good faith.8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other personor corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders,judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you shall not be liableto any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order,judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.9. You shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering orpurporting to execute or deliver the Grant Notice or any documents or papers deposited or called for hereunder.10. You shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint EscrowInstructions or any documents deposited with you.11. You shall be entitled to employ such legal counsel, including but not limited to Cooley LLP, and other experts as you maydeem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and maypay such counsel reasonable compensation therefor.12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be Secretary of the Company or if youshall resign by written notice to each party. In the event of any such termination, the Company may appoint any officer or assistant officerof the Company as successor Escrow Agent and Recipient hereby confirms the appointment of such successor or successors as hisattorney‑in‑fact and agent to the full extent of your appointment.13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations inrespect hereto, the necessary parties hereto shall join in furnishing such instruments.2. 109782575 v414. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession ofthe securities, you may (but are not obligated to) retain in your possession without liability to anyone all or any part of said securities untilsuch dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of acourt of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no dutywhatsoever to institute or defend any such proceedings.15. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personaldelivery or upon deposit in any United States Post Box, by registered or certified mail with postage and fees prepaid, addressed to each ofthe other parties hereunto entitled at the following addresses, or at such other addresses as a party may designate by ten (10) days’ writtennotice to each of the other parties hereto:COMPANY:Revance Therapeutics, Inc 7555 Gateway Boulevard Newark, California 94560 Attn: [General Counsel] RECIPIENT:_________________________________ _________________________________ _________________________________ _________________________________ ESCROW AGENT:Revance Therapeutics, Inc 7555 Gateway Boulevard Newark, California 94560 Attn: Corporate Secretary16. By signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions;you do not become a party to the Grant Notice.17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors andpermitted assigns. It is understood and agreed that references to “you” or “your” herein refer to the original Escrow Agent and to any and allsuccessor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under theGrant Notice and these Joint Escrow Instructions in whole or in part.18. This Agreement shall be governed by and interpreted and determined in accordance with the laws of the State of California, assuch laws are applied by California courts to contracts made and to be performed entirely in California by residents of that state.3. 109782575 v4 Very truly yours, REVANCE THERAPEUTICS, INC By: RECIPIENT ______________________________________________________ Name:____________________________________________ ESCROW AGRENT: ____________________________________ 4. 109782575 v4ASSIGNMENT SEPARATE FROM CERTIFICATEFOR VALUE RECEIVED and pursuant to that certain Restricted Stock Grant Notice and Restricted Stock Agreement (the “Award ”), [Participant’s Name] hereby sells, assigns and transfers unto Revance Therapeutics, Inc., a Delaware corporation (“ Assignee ”)________________________ (__________) shares of the common stock of the Assignee, standing in the undersigned’s name on the booksof said corporation represented by Certificate No. _____ herewith and do hereby irrevocably constitute and appoint_____________________ as attorney-in-fact to transfer the said stock on the books of the within named Company with full power ofsubstitution in the premises. This Assignment may be used only in accordance with and subject to the terms and conditions of the Award, inconnection with the reacquisition of shares of Common Stock of the Corporation issued to the undersigned pursuant to the Award, and onlyto the extent that such shares remain subject to the Corporation’s Reacquisition Right under the Award.Dated:___________________________ Signature:_________________________________________ [Participant's Name], Recipient[INSTRUCTION: Please do not fill in any blanks other than the signature line. The purpose of this Assignment is to enable the Companyto exercise its Reacquisition Right set forth in the Award without requiring additional signatures on your part. ] 109782575 v4Exhibit 10.34EXECUTIVE EMPLOYMENT AGREEMENTforAbhay Joshi, PhD, MBAThis Executive Employment Agreement (the “ Agreement ”), made between Revance Therapeutics, Inc. (the “ Company ”) andAbhay Joshi, PhD, MBA (“ Executive ”) (collectively, the “ Parties ”), is effective as of December 14, 2015 .WHEREAS , the Company desires for Executive to provide services to the Company; andWHEREAS , Executive is willing to accept employment by the Company, on the terms and conditions set forth in this Agreement;NOW, THEREFORE , in consideration of the mutual promises and covenants contained herein and for other good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:1. Employment by the Company.1.1 Position. Executive shall serve as the Company’s Chief Operating Officer. During the term of Executive’semployment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time andattention to the business of the Company, except for approved vacation periods and reasonable periods of illness or other incapacitiespermitted by the Company’s general employment policies.1.2 Duties and Location. Executive shall perform such duties as are required by the Company’s President and ChiefExecutive Officer, to whom Executive will report. Executive’s primary office location will be the Company’s office located in Newark,California. The Company reserves the right to reasonably require Executive to perform Executive’s duties at places other than Executive’sprimary office location from time to time, and to require reasonable business travel. The Company may modify Executive’s job title andduties as it deems necessary and appropriate in light of the Company’s needs and interests from time to time.1.3 Policies and Procedures. The employment relationship between the Parties shall be governed by the generalemployment policies and practices of the Company, except that when the terms of this Agreement differ from or are in conflict with theCompany’s general employment policies or practices, this Agreement shall control.2. Compensation.2.1 Salary. For services to be rendered hereunder, Executive shall receive a base salary at the rate of four hundred fortythousand dollars ($440,000.00) per year, or in the event of a portion of a year, a pro rata amount of such annual salary (the “ Base Salary”), subject to standard payroll deductions and withholdings and payable in accordance with the Company’s regular payroll schedule.Executive’s Base Salary shall be reviewed by the Board of Directors (the “Board” ) for possible adjustment annually.1. 124634191 v22.2 Bonus. In 2016, Executive will be eligible to receive an annual discretionary bonus of up to 45% of Executive’s BaseSalary. Executive will not be eligible for an annual bonus in 2015. Executive’s annual discretionary target bonus percentage, whetherExecutive receives an annual bonus for any given year, and the amount of any such annual bonus, will be determined by the Board in itssole discretion based upon the Company’s and Executive’s achievement of objectives and milestones to be determined on an annual basisby the Board in consultation with Executive. Bonuses are generally paid by March 15 following the applicable bonus year, and Executivemust be an active employee on the date any Annual Bonus is paid in order to earn any such Annual Bonus. Executive will not be eligiblefor, and will not earn, any Annual Bonus (including a prorated bonus) if Executive’s employment terminates for any reason before the dateAnnual Bonuses are paid.2.3 Standard Company Benefits. Executive shall be entitled to participate in all employee benefit programs for whichExecutive is eligible under the terms and conditions of the benefit plans that may be in effect from time to time and provided by theCompany to its employees. The Company reserves the right to cancel or change the benefit plans or programs it offers to its employees atany time.2.4 Expenses. The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred byExecutive in furtherance or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’sexpense reimbursement policy and requirements of the Internal Revenue Service as in effect from time to time.2.5 Equity. As a material inducement to Executive’s acceptance of the Company’s offer of employment, and subject toapproval by the Board or Compensation Committee of the Board, the Company will grant Executive an option to purchase 206,250 sharesof the Company’s common stock and 34,375 shares of restricted stock. Subject to Executive’s continuing service with the Company,Executive’s option to purchase shares of the Company’s common stock will vest over a period of four years, with 25% vesting upon thefirst annual anniversary of Executive’s start date (such start date, the “ Vesting Commencement Date ”) and 1/48 th vesting each monthover the remaining three years. Also, subject to Executive’ continuing service with the Company, Executive’s restricted shares will vestover a period of four years with 25% vesting annually commencing upon the Vesting Commencement Date. The Company understandsthat Executive would not accept employment with the Company but for the granting of these awards. Executive’s stock options andrestricted stock award will be governed in all respects by the terms of the Company’s 2014 Inducement Plan, as amended, which is a non-shareholder approved stock plan approved by the Board pursuant to the “inducement exception” provided under NASDAQ Listing Rule5635(c)(4), and restricted stock award and stock option agreements thereunder, which Executive will be required to sign as a condition ofreceiving the awards. 2.6 Signing/Retention Bonus. As an added incentive, Executive will receive a signing/retention bonus equal to$200,000.00 (the “Signing Bonus” ) (subject to all applicable deductions and tax withholdings), payable in four (4) equal $50,000.00installments, paid on the following dates: January 15, 2016, April 15, 2016, July 15, 2016, and October 15, 2016. By signing thisAgreement, Executive agrees to repay the full amount of the Signing Bonus if Executive resigns Executive’s employment for any reasonwithin one2. 124634191 v2year after Executive’s start date. Executive further authorizes the Company to deduct any amounts Executive may owe to the Companyunder this paragraph 2.6 from any amounts that the Company may owe Executive (including Executive’s final paycheck). Executiveunderstands and agrees that Executive must repay the Company any unpaid balance of the Signing Bonus remaining after that deduction ismade.3. Termination of Employment; Severance. Executive’s employment relationship is at-will. Either Executive or the Companymay terminate the employment relationship at any time, with or without cause or advance notice. Executive will be eligible forseverance under the Company’s Executive Severance Benefit Plan, adopted by the Board on December 17, 2013, as it may beamended from time to time, subject to the terms and conditions set forth therein.4. Proprietary Information Obligations. As a condition of employment, Executive shall be required to execute and abide by theterms of the Employee Proprietary Information and Inventions Agreement attached hereto.5. Outside Activities During Employment.5.1 Non-Company Business. Except with the prior written consent of the Board, Executive will not, during the term ofExecutive’s employment with the Company, undertake or engage in any other employment, occupation or business enterprise, other thanones in which Executive is a passive investor; provided, however, that Executive may (i) engage in activities that do not interfere with hisduties and obligations under this Agreement or create an actual or potential conflict of interest with the Company as reasonably determinedby the Board, and (ii) serve as a member of the Board of Directors of other entities subject to the approval of the Board with such approvalnot the be unreasonably withheld. Executive may engage in civic and not-for-profit activities so long as such activities do not materiallyinterfere with the performance of Executive’s duties hereunder.5.2 No Adverse Interests. Executive agrees not to acquire, assume or participate in, directly or indirectly, any position,investment or interest known to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise.6. Dispute Resolution. To ensure timely and economical resolution of any disputes that may arise in connection with Executive’semployment with the Company, as a condition of Executive’s employment, Executive and the Company hereby agree that any and allclaims, disputes or controversies of any nature whatsoever arising out of, or relating to, this letter, or its interpretation, enforcement, breach,performance or execution, Executive’s employment with the Company, or the termination of such employment, shall be resolved, to thefullest extent permitted by law, by final, binding and confidential arbitration conducted before a single arbitrator by JAMS, Inc. (“JAMS”)or its successor, under the then applicable JAMS arbitration rules (which can be found at http://www.jamsadr.com/rules-clauses/). Thearbitration shall take place in the county (or comparable governmental unit) in which Executive was last employed by the Company, asdetermined by the arbitrator; provided, however, that if the arbitrator determines there will be an undue hardship to Executive to have thearbitration in such location, the arbitrator will choose an alternative appropriate location. Executive and the Company each acknowledgethat by agreeing to this arbitration procedure, both3. 124634191 v2Executive and the Company waive the right to resolve any such dispute, claim or demand through a trial by jury or judge or byadministrative proceeding. Executive will have the right to be represented by legal counsel at Executive’s expense at any arbitrationproceeding. The arbitrator shall: (i) have the authority to compel adequate discovery for the resolution of the dispute and to award suchrelief as would otherwise be available under applicable law in a court proceeding; and (ii) issue a written statement signed by the arbitratorregarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’sessential findings and conclusions on which the award is based. The arbitrator, and not a court, shall also be authorized to determinewhether the provisions of this paragraph apply to a dispute, controversy, or claim sought to be resolved in accordance with these arbitrationprocedures. The Company shall pay all costs and fees in excess of the amount of court fees that Executive would be required to incur if thedispute were filed or decided in a court of law. Nothing in this Agreement is intended to prevent either Executive or the Company fromobtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any arbitration.7. General Provisions.7.1 Notices. Any notices provided must be in writing and will be deemed effective upon the earlier of personal delivery(including personal delivery by fax) or the next day after sending by overnight carrier, to the Company at its primary office location and toExecutive at the address as listed on the Company payroll.7.2 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to beeffective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respectunder any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or anyother jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping withthe intent of the parties.7.3 Waiver. Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shallnot thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.7.4 Complete Agreement. This Agreement constitutes the entire agreement between Executive and the Company withregard to this subject matter and is the complete, final, and exclusive embodiment of the Parties’ agreement with regard to this subjectmatter. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expresslycontained herein, and it supersedes any other such promises, warranties or representations. It is entered into without reliance on anypromise or representation other than those expressly contained herein, and it cannot be modified or amended except in a writing signed bya duly authorized officer of the Company.7.5 Counterparts. This Agreement may be executed in separate counterparts, any one of which need not containsignatures of more than one party, but all of which taken together will constitute one and the same Agreement.4. 124634191 v27.6 Headings. The headings of the paragraphs hereof are inserted for convenience only and shall not be deemed toconstitute a part hereof nor to affect the meaning thereof.7.7 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable byExecutive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may notassign any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, whichshall not be withheld unreasonably.7.8 Tax Withholding and Indemnification. All payments and awards contemplated or made pursuant to this Agreementwill be subject to withholdings of applicable taxes in compliance with all relevant laws and regulations of all appropriate governmentauthorities. Executive acknowledges and agrees that the Company has neither made any assurances nor any guarantees concerning the taxtreatment of any payments or awards contemplated by or made pursuant to this Agreement. Executive has had the opportunity to retain atax and financial advisor and fully understands the tax and economic consequences of all payments and awards made pursuant to theAgreement.7.9 Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement will begoverned by the laws of the State of California.5. 124634191 v2IN WITNESS WHEREOF , the Parties have executed this Agreement on the day and year first written above. REVANCE THERAPEUTICS, INC By: /s/Dan Browne____________________________ Dan Browne President & Cheif Executive Officer EXECUTIVE /s/ Abbay Joshi________________________________ Abbay Joshi, PhD, MBA6. 124634191 v2Exhibit 21.1R EVANCE T HERAPEUTICS , I NC .L IST OF S UBSIDIARIES1. Revance Therapeutics LTD, a wholly owned subsidiary incorporated in England and Wales.Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statements on Forms S‑8 (Nos. 333- 193963, 333-198499, 333-203235 and 333-208543) and theRegistration Statements on Form S-3 (Nos. 333-207469 and 333-202494) of Revance Therapeutics Inc. of our report dated March 4, 2016 relating to the financialstatements, which appears in this Form 10‑K./s/ PricewaterhouseCoopers LLP San Jose, CaliforniaMarch 4, 2016Exhibit 31.1CERTIFICATIONSI, L. Daniel Browne, certify that:1. I have reviewed this annual report on Form 10-K of Revance Therapeutics, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (theregistrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controlover financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adverselyaffect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financialreporting.Date: March 4, 2016 /s/ L. Daniel Browne L. Daniel Browne President and Chief Executive Officer (Principal Executive Officer) Exhibit 31.2CERTIFICATIONSI, Lauren P. Silvernail, certify that:1. I have reviewed this annual report on Form 10-K of Revance Therapeutics, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (theregistrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controlover financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adverselyaffect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financialreporting.Date: March 4, 2016 /s/ Lauren P. Silvernail Lauren P. Silvernail Chief Financial Officer and Chief Business Officer (Principal Financial Officer) Exhibit 32.1CERTIFICATIONPursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title18 of the United States Code (18 U.S.C. §1350), L. Daniel Browne, President and Chief Executive Officer of Revance Therapeutics, Inc. (the “Company”), hereby certifiesthat, to the best of his knowledge:1.The Company’s Annual Report on Form 10-K for the period ended December 31, 2015 (the “Annual Report”), to which this Certification is attached as Exhibit32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and2.The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.In Witness Whereof , the undersigned has set his hand hereto as of the 4 th day of March, 2016. /s/ L. Daniel Browne L. Daniel Browne President and Chief Executive Officer “This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated byreference into any filing of Revance Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether madebefore or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.”Exhibit 32.2CERTIFICATIONPursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title18 of the United States Code (18 U.S.C. §1350), Lauren P. Silvernail, Chief Financial Officer and Chief Business Officer of Revance Therapeutics, Inc. (the “Company”),hereby certifies that, to the best of her knowledge:1.The Company’s Annual Report on Form 10-K for the period ended December 31, 2015 (the “Annual Report”), to which this Certification is attached as Exhibit32.2, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and2.The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.In Witness Whereof , the undersigned has set her hand hereto as of the 4 th day of March, 2016. /s/ Lauren P. Silvernail Lauren P. Silvernail Chief Financial Officer and Chief Business Officer “This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated byreference into any filing of Revance Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether madebefore or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.”

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