The DouglerGood ol' Doug Loe, the most conservative Analyst on the street in terms of TH/THTX price targets, put out his report last night maintaining a Speculative Buy with a C$3.75 PT.
I have previously posted here that in the summer/fall he was critical of TH1902 and some of the risky R&D that the company was undertaking, and in hindsight that view was justified. However, in January he flipped to a pore constructive tone and remains optimistic about the future of TH's commercial assets.
Yesterday's report outlines expected egrifta growth off of the back of some of the recent metabolic research and a return to pre pandemic Tropgarzo sales levels. This combined with lower one-off/R&D spending would get them to a EBITDA break even run rate by year end. He also notes that the current specialty pharma (commercial) business is already EBITDA positive with margins of ~17% that could improve to the 30-40% industry norm.
When it comes to the R&D aspects, Doug does see opportunity with EGRIFTA in Nash and/or Cognition, but does not ascribe any value until a partner can be found. The same goes for TH1902. So unfortunately the business case in his valuation is saddled with expenses that are creating zero value. With this approach the better option would be to light the cash on fire and save on the heating bill this winter. At least that way there would be some expense savings! Jokes aside, Doug has been correct in his thesis to this point.
Overall, the report reads like a bit of a realtor sales brochure outlining the assets and future potential of the intellectual property. It seems to me like TH is for sale. Whether it go the 'timeshare' route and parsed up via partnerships, or a strong hand coming in to buy the whole plot of land, only time will tell.
In the meantime, Doug's PT is very realistic and to me is very achievable in the short term as TH delivers on revenue growth and margin improvement. Then there are the wild cards of partnerships that should have an even more positive impact on the price. So the investment thesis is a deep value into recovery play, with a couple lottery tickets for free. I assume this would be compelling enough for some to look past the going concern notes in the annual financials and take a position.