Theratechnologies Inc T.TH

RE:RE:RE:RE:RE:RE:RE:RE:Downgraded to 3, from 8…. With everything going on?!?

[qwerty22]

I buy what you're selling on oncology he has definitely picked the laziest route. I generally agree with you're approach on how to model this. The downside is you're piling assumption on assumption on assumption and within a few month we might get a better foundation for those assumptions. His baseline on oncology at this point is wrong but I believe he's data driven and if they report shrinking tumours he'll need to adjust.

I have some empathy for him. To some extent he's been burnt on NASH the way we have. I think he's the only market voice that came close to embracing the totality of the evidence argument, he recognizes that the drug fits into the catorgory of upstream fat-busters which looks the most successful atm. He made a stab at representing that opportunity in a commercial model. That distances him from the rest of the pack. Thtx failing to put all the pieces of the puzzle together has burnt him as much as us.

Wino115 wrote:

We shouldn't waste too much time on this since it's a one day algo puke, but he actually showed a revenue stream of royalties on NASH starting one year later, 2026.  It grows to around $170mil by 2028 and all profit.  So it's in model.

While I fully understand not having much of anything for cancer in a valuation, perhaps just option value, it shows how lazy they are when they all say "..there's no indication picked so I ignore it"  what a good analyst would do is look at each of the indications in the basket trial, look at the competitive products, look at the revenues and see what each could be and model out what each would look like post an approval.  Then dig into the FDA accellerated and breakthrough issues, what it means for timing using recent comps like Trodelvy and Padcev, etc...   They shouldn't be ignoring it completely but analyzing each market size.  Plus, it's pretty clear given how large TNBC is that if you see equal efficacy across each tumor type you'd choose that as the first.  Further, you may get the indication for all Sortilin expressing refractory tumors.  But they are all too lazy to do that.  

 

scarlet1967 wrote: Well he reduced his PT by 67% based on:
1-Better projected sales of Egrifta and less sales of Trogarzo? I guess he forgot as of now the sales of Egrifta with great margins and not shared is higher than the sales of Trogarzo, so the net effect on their income statement should be positive! Did he asked any questions re company's take on the competition for Trogarzo? No
2- The NASH partnership which could include upfront payments, future loyalty payments or at the bare minimum coverage of trial's cost is now worth less by 67% due to shared future revenues?


 

 

Wino115 wrote:

Lol, hilarious critique of the situation ;).  I believe the charity is sponsored by Cheetos.  As we hopefully see signs of the rebranding pulling in experienced biotech analysts over time, it is interesting to see all the stray mutts that wandered into the THTX alleyway and how none really embraced what was happening.  Then Eddie showed up and only cared about one asset, sort of like a mutt missing 2 legs.  It's still a rather bad situation and maybe getting better with milestones hit.  

it is the job of a CFO to manage and educate the street and to pull their exuberance in or push it along based on developments internally and externally in the industry. They should be striving for a fairly accurate representation of how they see it only based on facts they can discuss along with the occasional useful hint that doesn't breech any disclosure rules. They've never seemed to do that.  I think it's a byproduct of them really not quite understanding the way you need to nurture and build rapport with bankers and analysts and make sure they have a cushion in there for bad news so that if you meet your internal targets it's an earnings surprise on the positive end. Hopefully they'll get there under PL and with some new analysts covering 10p% of the comlany and understanding the whole industry. They need some credible voices to put this back on track with analysts.  Ed was definitely blindsided in that call.

"Theratechnologies reported business highlights and financial results for 2Q21 ended May 31, 2021, and we have made many changes to our model projections that have resulted in a rating reduction from Buy to HOLD and our price target dropping from $8 to $3. The company modified plans for the initiation of the tesamorelin Phase III trial in NASH and updated the progress for the oncology program, as well as the existing business regarding Trogarzo and Egrifta SV.

Considerations

• Approval of F8 formulation, expected in 2022, for Egrifta in HIV associated lipodystrophy likely needed to materially boost sales.

• Rukobia, an attachment inhibitor, from ViiV, is likely impacting use of Trogarzo. In addition, Gilead has submitted an NDA for lenacapavir, a long-acting HIV-1 capsid inhibitor for heavily treatment experienced HIV patients. Lenacapavir, similar to Rukobia, is orally administered, which is a preferrable option over IV. ViiV has a maturation inhibitor in Phase III, Merck has a nucleoside translocation inhibitor (islatravir) in Phase III. Finally, combination studies of islatravir and lenacapavir are being planned.

• Initiation of an F8 NASH trial is now dependent on a partnership to proceed. While we have assumed a 3Q22 initiation of the trial, timing is uncertain. While a joint- venture partnership is a possibility with the sharing of expenses and revenue, we have modeled a back-end royalty on net sales. We believe this is the more traditional and likely structure of any deal in NASH for the U.S. market. This consequently reduces our projections for revenue booked by Theratechnologies for F8 NASH.

• We currently do not model the Sortilin+ program as it is still early in clinical development and an indication has yet to be decided on.

 

qwerty22 wrote:

 

If somebody could copy and paste a big chunk of his rationale?

If that 8 bucks in some way was an attempt to represent the potential in NASH then there is good reason for the downgrade. The company giving up on their own internal program and narrowing the path forward to just partnership is a significant negative development. He is going to have to rebuild value through cancer.

But it does feel like the company has signed up for some charity program for bewildered analysts, they are all completely all over the place on what thtx actually is. Is it somebody's job the corral them?

 

Wino115 wrote:

 

Yawn...Eddie only cares about NASH and isn't broad enough to add in other biotechs or cover oncology. His industry is in the doldrums and now NASH is further off and Cantor, who gets the oncology side, jumped in and has actual clients -they are now banking front runners. He was clueless on cancer developments. His firm is being sold and he needs to figure out a new future. But it is one more broker they've managed to piss off.  

 

 

SABBOBCAT wrote: Sounds like good old Dubuc burned another bridge...