Theratechnologies Inc T.TH

National Bank On Th

[archeo753]

National Bank on Theratechnologies

 

04 Jan 202314:44 ET

 

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

MT Newswires Click for Restrictions.

[SABBOBCAT]

I mean it's hard to bicker now, but $3.25? Good friends we have over there at the local NBF office.

[qwerty22]

"However, any further investments in the development of these assets will be in the context of Thera achieving positive EBITDA / CF in f2023+" What do people think of Leno's statement here? I think you could read Paul's letter like that. It might suggest that the plan is not to start the cancer ASAP but even if they get a path worked out there might be some delay while they

[PWIB123]

I think I read the same, generally.  Leno is repeating what Paul said in the open letter.  I think it means that the opportunity to raise money is not on the table, and all further expenses will have to take place within the context of available cash flow.  That's a pretty tight space to work within right now.  I think you're correct in terms of the real possibility TH

[Wino115]

Partnering up around a theoretically good PDC platform could be the way, and we've now seen two such partnerships pop up recently. You'd think there would be someone out there who could be interested and drive a pretty sweet deal given how 1b went. 

[SPCEO1]

Let me first say that the stock is too cheap right now despite the problems the company now faces, which are significant on the financial side of the equation. THTX, like many investors, including myself, thought the chances were good that TH-1902 would achieve at least early stage success based of the really impressive pre-clinical work, the FDA backing that up with a very early Fast Track status

[Trogarzon]

Onthe Nash renewd interest I agree but Madrigal (MDGL) met both endpoints in P3 with flying colors.. like 60%+ improvement vs like 38% for THTX on top of Fibrosis improvements.  Even if TH has a path forward why would they approve it when the bar has been set so hight by Madrigal.

[PWIB123]

If I remember correctly, some of the ideas expressed on why THTX would still have a viable marketplace for NASH are as follows: 1. Tesamorelin sold as EGRIFTA is already a commercialized HIV drug and could be dual labeled.  Seems to reason HIV patients would change their drug regiment to include EGRIFTA to also combat NASH instead of adding another drug to their regiment. 2. Not everyone

[palinc2000]

Increased risks of cancer?? As you know I am not a scientist ....Where did you see that?    

[SPCEO1]

That was from way back  - it came up during the FDA Advocacy hearing for Egrifta. I don't think it has been a concern ever since and I have never seen any data that suggests it is a problem.

[Trogarzon]

ANother point about Nash... how can they make a deal with a partner without F8 approved.   From what we heard it was not expected before Q1 2024.  F8 is the key to having a extended patent and nobody would do a deal until they have that.. no.

[PWIB123]

Increased risk of cancer is still listed as one of the potential negative side effects on the website.  https://www.egriftasv.com/en/

[SPCEO1]

Right but I don't think anyone really believes that to be a real issue after all these years of Egrifta use without the drug being pulled from the market for causing cancer. If people really believed the risk factors listed on the FDA info for most drugs, they might never take any drug.

[palinc2000]

#^^|<#*~€^  

[scarlet1967]

“Cancer risk In theory, there is a risk that use of tesamorelin—because it stimulates the release of growth hormone, which can drive the growth of cancer cells—may increase the risk for cancer. However, rates of cancer were low and similar among recipients of tesamorelin and placebo. Moreover, there was only one case of cancer among tesamorelin users where doctors suspected that this drug may

[palinc2000]

I agree ---- It puzxkes me why this was brought up!!! Most drugs have all kinds of possible side effects even if very very very unlikely Even Luthatera can cause cancer according to   

[qwerty22]

It's still on the FDA label so it can't be ignored no matter it hasn't shown up in the past ten years of use. I might be wrong but I thought the planned Ph4 was in part to answer this but the FDA allowed that trial to be dropped. One consequence of that is the data isn't there to remove this warning from the label. https://www.accessdata.fda.gov/drugsatfda_docs/label/2010

[SPCEO1]

I agree - probably!

[Joemare]

Oh my, so much has happened since December.  Huge disappointment. Huge loss.  Very sad.  My opinion: They will put the oncology progra on the back-burner unless they calculate their chances of a successful proof of concept b)75% success rate (that is, get responses either  CR or PR in 30% of patients in one indication).  He's too conservative to move forward without