Case Study Of Revance Therapeutics And Radius Health

Decent Essays
1. Looking at Revance Therapeutics and Radius Health’s stock pricing performance show that Revance has had some miscalculations whereas Radius has grown to what it is now. Revance Therapeutics started at a $21 stock price and are currently at years end for 2016 at $21.25. The company started with a high stock price which immediately dropped and stayed low for their first year however over the span of three years they have been able to rise their price back to just above their starting price. However looking at Radius they hit the market with a lower stock price of $8 and over three years their stock prices have consistently increased. This can bring into question on whether Revance Therapeutics was overvalued in the beginning of their IPO process …show more content…
Both Revance Therapeutics and Radius Health have similar ownership structures. One difference is that Revance Therapeutics’ CEO has increased his percentage of shares by more than 2% over the past 3 years; whereas, Radius Health’s CEO has only increased his share percentage by a little over 1%. This is interesting due to the CEO of Revance Therapeutics being a co-founder but is not one of the top shareholders. When looking at which individuals has a controlling interest in shares of both companies the individuals are both board members, and most the shares owned by individuals are on the board of directors. This could help each company because the board members have more stake in the company so when the company is flourishing then they also reap the benefits. However in Revance Therapeutics, the top owner is a board member, Ronald W. Eastman, and he also has the most shares owned by board members excluding the CEO. On the latest DEF14A, Eastman was listed to own 14.33% of the shares whereas the board including Eastman own 14.53% of the shares. This could be a problem in the sense that Eastman could try to convince the board to listen to his ideas for the company because he has a bigger interest. When looking at Radius Health’s top owner, Ansbert Gadicke, there is a larger difference between the percent of shares owned by the board and what percent of that is just owned by Gadicke. This would reduce the amount of pressure that he could inflict on the rest of the board, and …show more content…
Finance and Economics Prompt Out of Revance Therapeutics and Radius Health I would suggest investing in Radius Health. Looking at their health of over the past three years since they have become an IPO company they have grown and expanded the company. Just looking at their stock closing prices for the past three years they have been an IPO Radius has increased their value by $30 since they started trading.
2. Both boards have served as good monitors for the CEO and the

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