01:33 PM EDT, 10/24/2023 (MT Newswires) -- Theratechnologies announced Tuesday that it will be tapering R&D activities not directly tied to its commercial platform/products, which will free up ~US$3.5 million in annual costs (with a US$1.5 million restructuring charge in fQ4). R&D will focus on supporting TH's commercial platform while development on the projects that will be wound down will be through partnerships. Note that the fully funded and ongoing Phase 1 oncology trial will be allowed to complete at which point TH will seek a partner.
Takeaways
Given the risks and costs associated with TH's early-stage R&D, National Bank has been advocating for a focus on commercial activities. Hence, TH's goal and actions to become a profitable organization are, in analyst Endri Leno's view, "positive and sensible moves."
Maintain Sector Perform rating and C$5.50 target
We are maintaining a Sector Perform rating and C$5.50 target based on a 1.5x EV to FY+1 Sales multiple.
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