Theratechnologies Inc T.TH

RE: Philippa

[Mugen1996]

RBC Dominion Securities Inc.

Philippa Flint (Analyst)

[phone]; [e-mail]

Underperform

Underperform

Speculative Risk

Price Target: 8.50

No defined regulatory pathway. A key concern we have is that the FDA has

not approved any product for GH-deficient abdominally obese patients, and to

date TH has not had any discussions on appropriate endpoints. Therefore, there

is considerable regulatory risk ahead. We assume discussions would take place

between TH and FDA prior to embarking on a long and expensive pivotal trial

program.

No defined regulatory pathway

• Market potential too vague to quantify. In our view, although one could

justify the market potential by estimating the percent of patients who suffer

from this condition and conservatively assuming a low market penetration,

these types of calculations are meaningless if the product never reaches the

market. Management suggested the market could be $0.9 to $1.8 billion in the

U.S. At this point in time, we assign no value to this indication as it is too early

in development, there is no identifiable regulatory approval pathway, and we

would expect reimbursement to be negligible.

• No material news. No comments on strategic review. Management did not

disclose any information on the ongoing strategic review. In our view, today's

news is a simple investigator-sponsored study that is not material to the

company's outlook.

Priced