Theratechnologies Inc T.TH

A summary of my thoughts

[SPCEO1]

Cancer clearly holds the biggest upside for THTX in the short term although a nice deal on NASH could boost the stock as well. I am hoping for slow growth in Egrifta sales and think slow declines in US Trogarzo will initially be offset by slow advances in European Trogarzo sales. Also, the commerncial sales end of THTX's business really could use more product to sell. It must not be easy to hire and retain good sales people with just these two mature products in the US and with only one in Europe covering only a small portion of that continent at the moment.  

But back to cancer. Like the analysts covering THTX, I have no value for cancer in my model. Without any human data, it is impossible to give it value. Yet we all know there is some value in the stock already for cancer and there should be because the very intriguing pre-clinical data and fast track status give the option that something good happens in cancer some value. Depending on what the phase 1a data tells us, beyond an assumed good safety profile, that option value could rise drammatically. Still, I would not be surprised if analysts do not incorporate any value for cancer in their models until after the phase 1b results are in. Nevertheless, THTX is now a cancer stock as far as the market is concerned and will remain one until the data tells us there is no hope for cancer or until management does something to crystallize the value of their NASH program. While the phase 1a cancer data will likely have a range of hope and disappointment attached to it, if there is any signs of efficacy, that will be very good. Given the trial has apparently gone on for a long time, there is good reason to expect both good safety results and some signs of efficacy. While the analysts may not be willing to give much or any value to cancer after the phase 1a results are in, if those results do include efficacy signals as well as an indication of a much wider therapeutic window, then a Breakthrough Therapy designation would likely be in the cards and that would certainly help the stock. Even if BTD is not recieved, the option value for cancer will rise.

NASH is harder than cancer in every respect. First, it is completely out of favor and the FDA's requirements make attaining success pretty difficult. Second, the trials are long and arduous. Recruiting patients willing to engage in liver biopsies is not easy. Reading those biopsies consistently so you get the appropriate results is challenging, which brings a new uncertainty into any NASH trial. Third, THTX does not have the money to launch the first phase of the trial (the first 400 patients) so it is reaching out for help in a NASH market that does not appear to be much interested. Fourth, that level of disinterest is made worse given the very odd way that THTX got to a phase III trial. So, while I really like that THTX pulled off a miracle to get to this place, it seems that miracle is not inspiring faith in either the potential partners or the investing masses that THTX can get NASH over the finish line. 

I want THTX to pursue its NASH phase III but I want them to do so in a non-suicidal manner. If that is not possible, it would be better to just set it aside for now and focus on cancer. Selling stock at low prices right now would be another unmitigated disaster. If management is unable to convince partners of the NASH programs worth and investors are not buying it either, then it would be suicidal to force the issue by self-funding it through a low priced share offering. And before management would do such a thing, they need to tell us legacy shareholders why we should fund it via accepting more dilution when they could not convince others to be interested in it. 

My concern if they were to do such a low-priced offering to fund the NASH phase III is that they were only doing it because they now know the cancer phase 1a results are not going to be special in any way and that they recognize the legacy drugs are going nowhere too. They might not be able to monetize NASH under the current circumstances but they may feel they need to keep the NASH program moving forward in order to have something to talk about over the next few years if the other two legs of their three legged stool might not be generating any more interest or excitement. 

So, I am defintely hoping for good phase 1a cancer results that will push the share price up allowing a share offering to raise the funds for the NASH phase III to be much less dilutive if no partner or alternative financing can be found. Ideally, they do something like my TNSH spin-off prior to the cancer data, thereby pushing the THTX share price up before that hopefully good news is released and pushes the stock even higher. That is the best case scenario I am hoping for. 

The worst case scenario is they have non-noteworthy cancer phase 1a results, NASH has to be put aside due to lack of funding and we are just looking at Egrifta for lipo and Trogarzo again. 

So, let's hope something close to the best case scenario plays out. If it does, it should be very good. Right now, the hints we have regarding cancer are all pretty good, so I think our hope is more than justified. But until we have the actual human data, it is just educated hope.

[palinc2000]

Paul did mention a few times that he would like or be open to in- licensing another drug . I think greater success with the existing drugs is needed before being able to have others rely on THTX to handle dales of one or more of their drugs,,,,,but I do like the concept

[SPCEO1]

Clearly, THTX is in a bit of an awkward spot with the two legacy drugs. Egrifta would seemingly have some upside if they can convince doctors of patients with both lipo and NAFLD that it would be wise to use the drug. It will also be helped by the F8 pen injector, when that becomes available. But we can see that the easier to use F4 did not move the needle much so I am not hoping for much on the

[jeffm34]

If no partner steps up to go in on the NASH phase 3 then the program should be shelved. If no other company is willing to spend their own money on it, why should we? They all have good scientists too that can analyze the same data Thera has evaluated.  I worried though management with go ahead anyways, thinking once again they are smarter than anyone else. If Grinspoon and the other experts

[SPCEO1]

I think their NASH program is worth proceeding with but only at a sensible price. If they cannot find a good alternative way of financing it and if THTX's stock price does not rise significantly on the back of any effort Cantor might make to push it higher or from the cancer data release, then they should just sit on it. And if they don't think they can convince investors that it is worth

[jeffm34]

I did look into the process to call a special meeting set out in the company bylaws. I will have to dig it up again. 

[Bucknelly21]

I would 100% back that 

[SABBOBCAT]

The fact that SPCEO is talking about calling a special meeting should be a HUGE wake up call for TH management if they are reading this. He is the most passive shareholder I have seen, yet he is getting fired up!