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02:44 PM EST, 01/04/2023 (MT Newswires) -- Theratechnologies announced a few corporate updates this morning. National Bank's Endri Leno notes the updates with the most positives include: Focusing on commercial operations and cost containment with the goal of 1) achieving positive EBITDA / Cash Flow in f2023+; and 2) leveraging its existing U.S. commercial infrastructure to explore the addition of commercial-stage assets. Development of the oncology assets, which are very early stage and not aligned with TH's commercial platform, remains on hold - clinical trial paused by TH and on partial clinical hold by the FDA. The company continues to evaluate options and to answer FDA questions with the goal of submitting an amended clinical trial protocol. However, any further investments in the development of these assets will be in the context of Thera achieving positive EBITDA / CF in f2023+. Other (more neutral) updates: Ahead of Q4/f22 reporting in February 2023, TH announced that it has met its previously announced f2022 revenue guidance of ~US$80 million (vs. NBF at US$80.8 million & consensus at ~US$79.0 million). For f2023, TH is guiding to revenues of US$90 to US$95 million (vs. NBF at US$95.0 million & consensus at US$92.0 million). Takeaways Leno is encouraged to see Theratechnologies refocusing on growing and profitably operating its commercial assets. While execution will be key, the company appears well-positioned to turn a corner given 1) CEO's extensive (35+ years) industry and sales experience; and 2) TH's precedent of having generated positive EBITDA and/or CF from the same commercial assets. As Theratech's decision to focus primarily on its commercial assets is less risky (vs. early-stage oncology clinical trials) and, likely, to yield results in the NTM, NBF considers this update to be positive. However, given expectations of a generally challenging operating/economic environment (i.e., inflation, labor scarcity, potential supply chain disruptions, etc.) the return to profitability will be monitored closely. Maintain Sector Perform rating and $3.25 target Price: 1.53, Change: +0.20, Percent Change: +15.04 |