archeo753 wrote: https://www.theglobeandmail.com/investing/markets/inside-the-market/article-fridays-analyst-upgrades-and-downgrades-for-jan-6/ In response to recent share price depreciation, Leede Jones Gable analyst Douglas Loe raised his recommendation for Theratechnologies Inc. (
) to “speculative buy” from “hold” following Thursday’s corporate update.
He said the recent “downdraft” was largely driven by the decision to voluntarily pause enrollment in the Phase 1 clinical trial of TH1902, its sortilin peptide-based cancer drug, and has widened the gap between his target price for its shares versus their present value.
“Ironically, the negative impact on TH share price that the Phase I TH-1902 halt last year imposed had no bearing on our fundamental valuation of the firm, and this continues to be the case in our ongoing investment thesis for the firm,” said Mr. Loe. “As before, our valuation is based on NPV (30-per-cent discount rate) and on ascribing multiples to our F2026 EBITDA/EPS forecasts (now US$31.6-million/US.12).
“In the medium term, the key value drivers for TH will be updates on its revised (and presumably FDA-endorsed) Phase I strategy for TH-1902 (we assume that no other sortilin peptide-conjugated drugs like doxorubicin-conjugated TH-1904 will advance into Phase I until ‘1902 Phase I testing concludes favorably) that we expect in coming weeks, and quarterly updates on sales trajectory for Egrifta/Trogarzo that we are optimistic will be consistent with guidance just provided.”
The analyst said there’s no major changes to his investment thesis stemming from the corporate update, which included projected sales for its Egrifta/Trogarzo commercial HIV-targeted biologics of US$80-million (versus Mr. Loe’s US$87.8-million forecast) in 2022 and US$90-$95-million (versus US$83.4-million) in 2023.
“F2023 revenue guidance seems reasonable to us at the low end, likely driven by Trogarzo growth from pandemic-constrained F2021/22 levels,” said the analyst. “We will provide commentary on our own Egrifta/Trogarzo sales expectations below, but our key takeaway is that our legacy expectations in retrospect were conservative and based mostly on Trogarzo upside from COVID-19-constrained F2021/22 levels, we agree that the low end of Thera’s F2023 revenue guidance represents a reasonable baseline expectation for collective performance of both drugs.”
While he expressing “caution” on TH-1902′s valuation, Mr. Loew endorsed “proceeding with Phase I activities for what we see as an attractive targeted anticancer platform,” maintaining a $3.75 for Theratechnologies shares. The average is $4.18.
Theratechnologies
1.55-2.13 (-57.88%)
Past year
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