Theratechnologies Inc T.TH

Further to my TNSH listing idea

[SPCEO1]

I put that together pretty quickly and did not have tome to fully flesh it out,and still don't, but I thought  I should at least mention that the idea of buying back the convert (last traded at $91) was that it would give the broker more fees to entice them to take THTX seriously and because the hope would be that the $200 million share sale of THTX shares following the release of the cancer data (and also following the stock finally reflecting some significant value for the TNSH holding following its listing), would be done at a price higher than the $14.80 conversion value of the convert.

So, my hope would be the listing of TNSH would roughly double the share price of THTX, the redemption of the convert would add further to the share price and then the cancer data would be good enough to really get the stock going, in large part because we would now have the backing of a major US broker to spread the news of that data to a much more welcoming group of now institutional shareholders who are pretty excited about the prospects of THTX's TH-1902. 

Now, that all depends on the cnacer data being good. THTX likely already knows quite a bit about that data so they can handicap whether such a bold move makes sense. But the TNSH listing makes sense in almost any scenario and is not reliant on cancer  to make it work. 

The alternative, and because we have not seen a lot of boldness from THTX in the finance area, most likely scenario, is to simply report out good cancer data and sell enough shares to fund the NASH trial at that time. But I think that process results in a much lower share price because it is less likely to entice a major US broker to get involved with THTX. 

My suggestion also counts on that big broker being able to earn very large fees and I don't think THTX gets their attention without paying out some big fees to them. It also assumes that broker feels confident they can place $200 million in TNSH shares. My guess is that broker's confidence about that rises as the fees they could potentially earn rises. 

THTX's NASH asset is the result of some tremendous work by the company. Few would have believed they could pull off what they have pulled off in NASH. But the job is not done until the phase III is at least partly financed and taking a bold financial move to match the bold medical moves THTX has already made seems like a good idea. The math works unless THTX does not really believe its NASH asset is somewhat comparable in terms of likely success to IVA and AKRO. Even then the terms I have suggested put it at a significant discount to those two competitors, to say nothing of the huge discount to MDGL.

Get 'er done!

[palinc2000]

I am pretty sure that the Convert cannot be redeemed before maturity except if the SP close to maturity exceeds or is equal to the Conversion price

[SPCEO1]

That is correct. But what I am talking about is a tender offer for those converts.

[palinc2000]

Why would  holders of the Convert tender ?? A tender Offer at par would be ignored by the Holders 

[SPCEO1]

Why wouldn't they if it gives them a nice little profit from where the convert is currently trading. There is nothing special about TH's convert - it can be easily replaced with others in any convertible portfolio. Now, I would not expect all the convert holders to convert since many are likely held in none institutional hands. But for those that are held in institutional hands they may

[palinc2000]

There has not been any real trading in the Convert,So the vast majority of Holders (allmost all) have a cost base equal to the face value (par) Chances of the Convert going into default appear to be very slim at the moment and will be considered as nil if there were a Tender Offer,So the Holders are getting a nice interest of over5% and a  remote chance to make more if the SP exceeds the

[SPCEO1]

There is not a big incentive but there is some. 100 is definitely better than 91 and given the lack of liquidity in the convert being able to easily sell it without impacting the price is worth something as well. You can take those proceeds and easily replace the TH convert with something similar. quote=palinc2000]There has not been any real trading in the Convert,So the vast majority of Holders

[palinc2000]

Waiting for Phase 1 results is a flawed strategy unless the company is already aware of positive results ,,,,,

[qwerty22]

One weakness of this is from the risk perspective. If we finally get an active NASH program then both clinical programs are a hedge against the other programs failure. Once you split NASH off as a separate entity then TNSH loses cancer as a hedge. The scenario is still fine for thtx shareholders cause you still have skin in the game with both programs but TNSH loses any benefits from success in

[SPCEO1]

The investors valuing AKRO, IVA and MDGL where they are valuing them have no hedges from other programs, so that does not seem to be an issue. In fact, they may want to sell their holdings and buy the much cheaper TNSH to play the possibility of one of these companies being a winner in NASH. Or they might want to own a number of NASH players as they do not know which will win, but whoever does win

[PWIB123]

I hope you've sent these ideas to the entire executive team.  Historically, with other companies I've followed in the past, when a division is spun off, it seems like it usually creates additional value for shareholders.  Usually those assets were generating some form of cash flow, however, the underlying value wasn't being recognized.  I think this strategy should be

[Wino115]

Here's their Plan B, or maybe even a Plan A.  Drug Development investor with pharma experience (including Pfizer) and backed by Blackstone Life Sciences and Abingworth.  Both have done investments like what THTX is looking for.  They may not bring as much "in the clinic" experience as a pure pharma, but it's pretty close.   SFJ Pharma (Strat Dev & JV)...

[Wino115]

Pfizer's done 4-5 deals with them, Nektar just did one for Bempeg at $150mil and they do from $50 to $500mil.  Like Phase 3 projects.  Pretty interesting option and maybe better than what a big pharma would give you.  You can see what they give you based on things like Bempeg, so it's pretty transparent and more financial and support.  Perhaps what they could use to

[qwerty22]

Another good idea. What we need to know is whether they are exploring all these ideas under the guise of looking for a partner. The goal is just to get a Ph3 started under the best terms for the company (and shareholders). What are the chances they are exploring all these? Or put it another way what are the chances they a failing to do their job right?

[qwerty22]

This is the company the new commercial development guy at thtx used to work at. Is this a similar process thing? https://www.admarebio.com/partnering-with-companies/the-admare-advantage/

[Wino115]

Looks fairly similar with the exception that they don't seem to have a large amount of committed capital that is "venture-like" and seeking a competitive return. It says the money comes from government, institutions, foundations and supporters. But I suppose it functions pretty similarly except for a slightly watered-down "market return" expectation. There's a bit more

[SPCEO1]

Do you know what a typical deal looks like for the drug company? I cannot make out what SFJ normally gets in exchange for their financing? 

[Wino115]

I have not been able to figure that out from just PR announcements.  Likely need to dig in to various filings to get actual economics of these deals. Will try to see if I can find one.  But did notice none of their deals appear to be in NASH yet, and lots of oncology.  So they may like the shorter start to finish on those.