Theratechnologies Inc T.TH

Additional thoughts on the ATM

[SPCEO1]

If the meetings with US institutions went verry well last week (and I could see how that might be the case) those institutions might be pressing THTX to sell them shares. But if THTX was going to do that, why would they set up an ATM? Why not just do a regular offering under the current $150 million shelf offering that I am pretty sure is still in place? Since this is apparently not the case, it seems to me they intend to sit on this ATM option until a more optimal time to sell shares, just like they have sat on the shelf offering for nearly two years. 

In the last conference call, the words "shareholder value" made an appearance. Those words have not been uttered a lot by THTX management over the years and I was heartened to see them make an appearance. Hopefully, we will see them back up those words with action and continue to process of rebuilding their credibility with investors. Everything will be easier for Paul and the board in the years to come if they are able to rebuild that credibility and everything will be harder if they blow it up once more. 

There is a classic proverb in the Bible; "As a dog returns to its vomit, so a fool returns to its folly". Let's hope THTX management and board do not return to their previous folly. 

I have asked Leah Gibson to priovide any context she can regarding the deal and will pass along anything she might offer in that regard.

[scarlet1967]

I hope she clarifies why now and what is the reason for it. All these u turns from HIV to general NASH to going alone and now partnership although all are sensible decisions, they also cause some confusion. This hole NASH saga has been nothing but confusing thus no decent positive reaction from the market despite the fact it's now harmonized with a clearer potential path to progress. They got

[SPCEO1]

I asked those questions and she got back but didn't answer them. So I asked them again.

[PWIB123]

At first I thought the ATM had to be the result of a positive development or strategy to strengthen their position in in way that will prove additional shareholders value. Now it just looks like the potential for further dilution. If they don't make an announcement by Monday morning and clarify the intent, I'm cutting my losses and significantly reducing my position. I don't understand

[jfm1330]

You really think Cantor would work with Thera on that and have them to do a presentation if there was a negative outcome was imminent? To me it looks like the contrary. There were unable to work with a firm like Cantor up to now, and finally, Cantor is seeing enough potential to have Thera as a client. Again. It all comes down to trust in the management. If you think you were stolen on purpose by

[SPCEO1]

I tend to agree with your comment that Cantor would be unlikely to work with TH if a negative event was on the horizon. But when I see that Louise Chen covers 35 stocks and has 34 of them rateed as Buys when the market is hitting all-time highs, one has to pause a bit and wonder if she is not in this just for the deals and would be willing to do whatever is necessary to get that next check. On

[palinc2000]

spceo You just posted this because our CEO flat out told us he would not sell until the share price was much higher, because the warrant was unnecessary  When did he say that? I dont recall

[palinc2000]

Institutions would not have much problem in taking  a position by buying in the open market .... The SP would trend higher of course but not that much .......5 USD would allow them to buy millions of shares in the open market....So the ATM is not imo about giving access to institutions It is about the INSATIABLE NEED for CASH in biotechs looking to fund their pipeline....  Maybe this

[SPCEO1]

Do you have any guesses as to what this rabbit might be? Some new development in their cancer program that needs funding? A quick reversal on the decision to partner NASH (hard to see this), or an acquisition? Or something else you might be thinking of as a possibility? And while you are right that an institution could acquire, say, 5 million shares or a 5% stake equating to about $17.5 million

[palinc2000]

I am not predicting a rabbit but this is the only thing that would make sense other than the BOD wanting to set aside funds in the short term  to repay the Convert when it becomes due. (In case oncology fails and Nash drags on) You posted yesterday that there is hope that the Debenture Holder do convert....That would mean that the market cap would reach about 1.5 billion in less than 2 years

[palinc2000]

Just based on what is  currently available in terms of info I would be elated if the weighted  average issue price under the ATM reached 5 US $,,,,I just dont have any idea of what THTX red line stands ,,,,I suspect it is lower

[Bucknelly21]

[scarlet1967]

I apologize in advance for being so critical. The issue still is clear communication, shareholders of a public company shouldn’t have additional thoughts about big decisions made by the board, $50M is substantial amount of money for a small biotech like THTX and needs clear clarification re what is the purpose of the raise and why now just few months after previous offering. I believe there has

[jeffm34]

If TH does find a partner for NASH they will still likely have to fund a portion of the phase 3 trial with the partner funding some as well. I'm guessing $50M would be sufficient to fund TH's portion of development. 

[jfm1330]

Finally, somebody comes with a good hypothesis. Good results in oncology, advanced partnership negociations on NASH, stock price goes up, They are able to get their 50 M$ and finance their part of the phase III. Also, good results in oncology could means FDA allowing for a really fast track to approval, but it will cost more than expected to do that due to doing a larger sized trial sooner than

[scarlet1967]

We need to know their plans for the funds , is it to fund NASH alone or to strike better deal with a partner, is it to strengthen their balance sheet due to upcoming converts, is it for future oncology programs or other projects... this is a good amount of money and sizeable dilution which needs to be justified one way or the other. They shouldn't dilute us without a clarification. This is a

[jeffm34]

the ATM may be an indication of what type of partnership deal they are looking for in NASH and possibly how far along they may be in discussions with potential partners.  

[scarlet1967]

How about to try convince future investors to get involved in a company who raises funds based on insecurity or no clear reason at all? 

[SPCEO1]

I hope such a scenario plays out as it is all positive stuff. I have no problem with the company raising money in a sensible way for sensible projects. A growing company financing its growth sensibly is a very attractive proposition and will attract investors. What you have both described is all very sensible assuming the terms are good on both the partnership and any associated stock sale via the

[jeffm34]

if the ATM is to fund the NASH program, they came out with a specific number. $50M, which would mean they would have to know how much of the trial they are funding. They needed 2 critical elements to move NASH forward. Acceptance of a suitable trial design from the FDA and and EMA and a way to fund it. 

[qwerty22]

NASH is super clear if you allow it to be but you have to give up some of the certainty you have around it. They couldn't put all the pieces of the puzzle together to get their own internal program going so they are forced to seek partners. If circumstances change then that might change but for now that sums up the NASH situation. Unlocking NASH value depends on doing a deal. They could go

[SPCEO1]

No need to apologize as those are legitimate points you are making. The company needs to keep getting better at selling their vision to investors. But first they need to decide what that vision is. Increasingly, it is looking like they are a cancer stock with an opportunity to revolutionize the way cancer is treated. Maybe they should approach Taimed to see if they want to buy the rights to both

[Scioto1]

I agree scarlet. Not 5 months after a financial move without sound communication to shareholders, and all the turmoil that created, we get this release, end of the week with with no meaningful communication.

[SPCEO1]

Now, we may want to consider that another shoe will drop realtively quickly that will help make sense of the late Friday PR with no explanation. Also, did anyone else recieve the PR in their e-mail? Unlike other PR's, I did not get an e-mail for this one. Do they only e-mail out certain PR's? If so, that is a policy that needs to change.

[palinc2000]

The PR is not even on the website

[jfm1330]

Always this communication cr*p over and over. I think one reason I would want really great news in oncology is that it will show how fast the news will spread without anything different made by the management.

[scarlet1967]

How often did you say trust the company or sell, well that's a great sale pitch to new investors! The trust has to be earned, opacity isn't going to cut it I am afraid. Yes there is constant need for clear communication so investors understand why they should invest in this company and stay invested rather than go with hundreds of similar other small caps. To announce the ATM program and

[Wino115]

We may get more answers from Cantor.  Perhaps ask same questions you asked LG to a Cantor salesperson.  I have to believe that since they clearly do not need any money at this point and they are hopefully getting good advice from the Board on shareholder friendly policy, that they do not remotely believe they should be issuing shares here.   If so, it would only be an indicator.

[palinc2000]

Apart from  them pulling a rabbit how do you feel about the  timing of the announcement i,e, low price and low volume environment ,appearance of precipitous decision ,impossibility to get access to the Prospectus Supplememt which may or may not reveal any new info  ,not even a broad outline of thre intended use of the proceeds etc

[SPCEO1]

It is not the best look. Hopefully, they will get it cleaned up. I do not have a contact at Cantor, unfortunately.

[palinc2000]

No offense spceo my question was meant to be directed to Wino,,,,,

[SPCEO1]

Oops - sorry! Wino will give you a better answer too.

[Wino115]

The timing is very odd except for one fact.  They just did a lot of meetings with Cantor clients and they are desperate for someone to write up a full fledged report with the whole pipeline valued.  Otherwise, why wouldn't you wait to see MTD and POC news.  The question is, what is that worth? Clearly not issuing all $50mil around these prices.  That would be criminal

[qwerty22]

Yeah, insatiable need. Maybe the lack of interest in NASH was a lesson, it has them looking to open every avenue to cash.

[SPCEO1]

May I suggest you be careful of the confirmation bias issue with your views on NASH (we all struggle with it, of course - it is part of the human condition). You are assuming NASH is not highly valued but Wino put out a summary of a conversation with a VC player who knows the area well and he indicated they would be able to achieve significant value from it. So, while it may be satisfying to you

[qwerty22]

Paul talked about unlocking value in NASH with a partner. My assumption is it hasn't been unlocked already by what they have already done. In a post earlier you said NASH was not priced into the stock. On both their big announcements (go to general Nash and final protocol) the market shrugged. At every turn the market took no interest. I know you are going to tell me it's because nobody is

[SPCEO1]

I think we generally agree but I believe you are much further out on the negativity spectrum then I on NASH. I have questions about the NASH situation but you seem more convinced it has no or little value. That just seems a bit extreme to me, but I acknowledge it could be correct. The MDGL Indicator I have suggested using to measure investor and corporate interest in NASH is not looking real good

[qwerty22]

A lot of my negativity is in reaction to the positivity here and less to the company. There has been some ignoring of the uncertainties and risks and I've wanted to bring those to the discussion in the hope it helps to understand the issues. From when they announced partnering I said getting to the end of the regulatory process takes on new meaning because it is definitely a bonus in the

[qwerty22]

Can the ATM be something to do with the lack of liquidity in the stock. Is there not enough sellors? The obvious answer is to let the stock go up but can this be a tool to deal with short term illiquidity? I don't know the processes of the market, stab in the dark.  

[scarlet1967]

Nop, float is over 86m.

[SPCEO1]

Institutions cannot buy enough of the stock to make an impact in their portfolios without sending the share price a lot higher because it is a small cap stock. So they tell the company they will buy a big chunk in an offering, which the company likes because it gets a big new injection of cash. Shareholders like ourselves, however, are the loses as the new buyers get in without pushing the share