Theratechnologies Inc. (Theratechnologies, or Company) (TSX: TH)
(NASDAQ: THTX), a biopharmaceutical company focused on the
development and commercialization of innovative therapies, today
reported business highlights and financial results for the first
quarter ended February 28, 2021 (Q1 Fiscal 2021).
“Theratechnologies is at a unique point in its
evolution, and we have a tremendous opportunity ahead of us,” said
Paul Levesque, President and Chief Executive Officer at
Theratechnologies. “We are particularly pleased with the swift
advancement of our Phase 1 oncology program, which has dosed its
first patient, and the continued progress we have made toward
advancing our Phase 3 trial in NASH.
“We believe we are well-positioned for growth
when we begin to emerge from the COVID-19 pandemic.
Inline with these efforts is our continued focus on strengthening
our business with the addition of key talent and resources. While
first-quarter revenues were relatively flat year-over-year, we
believe that we have aligned our organization to provide an optimal
landscape to further validate and drive value for our commercial
and R&D opportunities,” concluded Mr. Levesque.
First-Quarter 2021 Revenues
(in thousands of U.S. dollars)
|
Three Months Ended February, |
% change |
|
28, 2021 |
|
29, 2020 |
|
|
EGRIFTA®, EGRIFTA SV® net sales |
8,688 |
|
8,515 |
|
2.0 |
|
Trogarzo® net sales |
6,742 |
|
7,204 |
|
(6.4 |
) |
Revenue |
15,430 |
|
15,719 |
|
(1.8 |
) |
Recent Highlights and Program
Updates
- Additional data for TH1902
at AACR support broad applicability: On April 10, 2021,
new positive preclinical data on TH1902 were presented in two
posters at the American Association for Cancer Research (AACR).
These data demonstrated sustained tumor regression, better
anti-tumor activity and tolerability with TH1902 compared to
docetaxel alone in all cancer types studied, namely melanoma,
pancreatic, ovarian, endometrial, colorectal and triple-negative
breast cancers. The anti-tumor effect of TH1902 also persisted
longer post-treatment than with docetaxel alone. Furthermore, these
data showed that in all cancers studied, neutropenia was absent
after six consecutive treatments with TH1902 at an equivalent dose
of the maximum tolerated dose (MTD) of docetaxel, whereas a single
treatment of docetaxel strongly reduced neutrophil counts. These
new data further support the development of TH1902 for the
potential treatment in various cancers as well as highlight its
broad applicability in potentially treating all sortilin-expressing
solid tumors that are refractory to standard therapy.
-
Strategic additions to commercial organization: On
March 29, 2021, Theratechnologies announced the addition of two new
senior leaders to support the Company’s commercial and pipeline
operations. John Leasure joined the Company as the Global
Commercial Officer and Peter Kowal joined as Vice President,
HIV-U.S. Commercial Operations. John and Peter bring to
Theratechnologies sales and marketing expertise in HIV,
endocrinology and oncology.
- Phase 1
trial of TH1902 for the treatment of cancer initiated: In
March 2021, the Company initiated a Phase 1 clinical trial
evaluating TH1902, its investigational lead peptide-drug conjugate
(PDC), for the treatment of sortilin positive (SORT1+) solid
tumors. The Phase 1 clinical trial includes a
dose-escalating part to evaluate the safety, pharmacokinetics,
maximum tolerated dose (MTD) and preliminary anti-tumor activity of
TH1902 administered once every three weeks in patients with
advanced solid tumors refractory to available anti-cancer
therapies. Once the MTD is determined, it is planned that a total
of 40 additional patients will be enrolled to evaluate the
potential anti-tumor activity of TH1902 in patients with
endometrial, ovarian, colorectal, pancreatic and triple negative
breast cancers. The Company received fast track designation from
the U.S. Food and Drug Administration (FDA) for TH1902 in February
2021.
- Planned
Phase 3 trial of tesamorelin for the treatment of nonalcoholic
steatohepatitis (NASH): The initiation of a Phase 3
clinical trial evaluating tesamorelin for the treatment of NASH is
on track to begin in the third quarter of calendar year 2021. Per
the FDA’s recommendation, the Company has confirmed a date to meet
with the agency and discuss the proposed trial design and
protocol. The Company received a “Study May Proceed”
letter for the Phase 3 trial from the FDA in January 2021 and has
retained the services of a global, large-scale contract research
organization (CRO) with experience in implementing large and
late-stage clinical trials to assist with the execution of the
trial.
-
Intellectual property position strengthened in
NASH: On March 16, 2021, the U.S. Patent and
Trademark Office (USPTO) issued a new U.S. Patent, No. 10,946,073,
covering among other things, a method for preventing or delaying
the onset of liver fibrosis or reducing liver fibrosis or its
progression in a subject suffering from nonalcoholic fatty liver
disease (NAFLD) or NASH, wherein said subject has a hepatic fat
fraction of at least about 10%, through the administration of an
effective amount of tesamorelin. This patent is scheduled to expire
in 2040 and adds to the Company’s strong intellectual property
position in NASH. Theratechnologies has an exclusive
license with Massachusetts General Hospital (MGH) to this patent.
Combined with previously announced patents, the Company is
well-positioned in the development and potential commercialization
of tesamorelin for the treatment of NASH and other liver
diseases.
-
Lifecycle management of tesamorelin for the treatment of
HIV: The Company has developed a new formulation of
tesamorelin known as the “F8 formulation”. The F8 formulation has a
number of significant improvements over our current F4 formulation,
which is currently commercialized as EGIRFTA SV® for the treatment
of HIV-associated lipodystrophy. The F8 formulation is twice as
concentrated as the F4 formulation resulting in a smaller volume of
administration and is intended to be presented in a multi-dose vial
that can be reconstituted once per week. A multi-dose
pen injector is also being developed for the administration of the
F8 formulation. The Company plans to file an sBLA for the F8
formulation and multi-dose pen injector in early 2022 for the
treatment of HIV-associated lipodystrophy and plans to use the F8
formulation for its planned Phase 3 clinical trial in NASH.
- Lifecycle management of
ibalizumab for the treatment of HIV: Enrollment is
complete in a study evaluating an intravenous (IV) push
administration of Trogarzo® for the treatment of human
immunodeficiency virus type 1 (HIV-1) infection. The study is
evaluating the drug levels of Trogarzo® using the IV push
administration versus the approved IV infusion method and is
expected to be completed in the third quarter of 2021. The IV study
is being conducted and funded by the Company’s partner, TaiMed
Biologics (TaiMed). Theratechnologies and TaiMed are
also planning to evaluate an intramuscular (IM) method of
administration for Trogarzo® and the study will be conducted and
funded by Theratechnologies.
First-Quarter Fiscal 2021 Financial
Results
RevenueConsolidated revenue for
the three-month period ended February 28, 2021 was $15,430,000
compared to $15,719,000 for the same period ended February 29,
2020.
For the first quarter of fiscal 2021, net
sales of EGRIFTA SV® reached $8,688,000 compared to $8,515,000 in
the first quarter of the prior year, representing an increase of
2.0% over the first quarter of 2020, which included sales of both
EGRIFTA SV® and EGRIFTA®.
In the first quarter of fiscal 2021, Trogarzo®
net sales amounted to $6,742,000 compared to $7,204,000 for the
same quarter of 2020, representing a decrease of 6.4%.
Lower sales of Trogarzo® were a result of a decrease in unit sales,
and higher rebates, which were offset by a higher selling
price.
Cost of SalesFor the three
months ended February 28, 2021, cost of sales was $5,411,000
compared to $6,761,000 for the same quarter in fiscal 2020,
primarily due to the lower cost of goods sold. Cost of goods sold
was $4,190,000 in the first quarter of 2021 compared to $5,400,000
for the same quarter the previous year. The decrease in cost of
goods sold was mainly due to a combination of lower Trogarzo®
sales, a lower cost for Trogarzo® and a lower cost of EGRIFTA SV®
compared to EGRIFTA®. Cost of sales also included the amortization
of the other asset of $1,221,000 in both Q1 fiscal 2021 and Q1
fiscal 2020.
R&D ExpensesR&D
expenses amounted to $4,883,000 in the three-month period ended
February 28, 2021 compared to $3,419,000 for the same period in
2020. The increase was largely due to higher spending in our
oncology and NASH programs, increased spending in medical and
patient education, as well as increased medical affairs spending in
Europe.
Selling ExpensesSelling
expenses amounted to $6,158,000 for the first quarter of 2021
compared to $6,361,000 for the same three-month period last year,
reflecting a realignment of spending as a result of a lower
headcount in our salesforce.
The amortization of the intangible asset value
for the EGRIFTA® and Trogarzo® commercialization rights is also
included in selling and market development expenses. As such, we
recorded an expense of $795,000 for the first quarter of fiscal
2021 compared to $642,000 for the same quarter last year.
General and Administrative
ExpensesGeneral and administrative expenses amounted to
$3,562,000 for the three months ended February 28, 2021 compared to
$2,570,000 for the first quarter of 2020. The increase in general
and administrative expenses was mainly associated with an overall
increase in business activities and increased activity in
Europe.
Finance IncomeFinance income,
consisting of interest income, amounted to $25,000 during the first
quarter of 2021 compared to $166,000 in the first quarter of last
year. Lower finance income was due in large part to a decreased
liquidity position and a decrease in interest rates.
Finance CostsFinance costs for
the three months ended February 28, 2021 were $1,357,000 compared
to $1,318,000 for the comparable period of 2020. Finance costs in
the first quarter of 2021 and 2020 included interest of $802,000 on
the senior convertible notes issued in June 2018.
Finance costs also included accretion expense of
$581,000, compared to $502,000 for the comparable period in
2020.
Adjusted EBITDAAdjusted EBITDA
was $(1,821,000) for the first quarter of fiscal 2021 compared to
$(994,000) for the same period of 2020. See “Non-IFRS
Financial Measures” below.
Net lossTaking into account the
revenue and expense variations described above, we recorded a net
loss of $5,922,000 or $0.07 per share in the first three months of
fiscal 2021 compared to a net loss of $4,544,000 or $0.06 per share
for the same period last year.
Financial PositionWe ended the
first quarter of fiscal 2021 with $56,716,000 in cash, bonds and
money market funds.
During the first quarter of fiscal 2021, the
Company completed a public offering for the sale and issuance of
16,727,900 units of the Company for a gross cash consideration of
$46,002,000 including the full exercise of the over-allotment
option. Share issue costs amounted to $3,385,000 resulting in net
proceeds of $42,617,000.
Each unit is comprised of one common share of
the Company and one-half of one common share purchase warrant of
the Company (each whole warrant, a “Warrant”). Each Warrant
entitles the holder to purchase one common share of the Company at
an exercise price of $3.18 until January 19, 2024.
Our current cash, bond and money market funds
will be sufficient to fund the Company’s operations for the
foreseeable future.
For the three-month period ended February
28, 2021, operating activities used $5,228,000 compared to
$4,825,000 in the comparable period of fiscal 2020, primarily
due to the increased loss in 2021, partially offset by a smaller
negative impact of changes in operating assets and liabilities.
In the first quarter of fiscal 2021,
changes in operating assets and liabilities had a negative impact
on cash flow of $3,332,000 (2020-negative impact of $3,832,000).
These changes included a negative impact from accounts payables and
accrued liabilities and inventories, and were offset by a decrease
in trade and other receivables and an increase in provisions.
Non-IFRS Financial Measures
Reconciliation of net profit or loss to adjusted earnings before
interest, taxes, depreciation and amortization (Adjusted
EBITDA)
Adjusted EBITDA is a non-IFRS financial measure.
A reconciliation of the Adjusted EBITDA to net loss is presented in
the table below. We use adjusted financial measures to assess our
operating performance. Securities regulations require that
companies caution readers that earnings and other measures adjusted
to a basis other than IFRS do not have standardized meanings and
are unlikely to be comparable to similar measures used by other
companies. Accordingly, they should not be considered in isolation.
We use Adjusted EBITDA to measure operating performance from one
period to the next without the variation caused by certain
adjustments that could potentially distort the analysis of trends
in our business, and because we believe it provides meaningful
information on our financial condition and operating results.
We obtain our Adjusted EBITDA measurement by
adding to net profit or loss, finance income and costs,
depreciation and amortization, and income taxes. We also exclude
the effects of certain non-monetary transactions recorded, such as
share-based compensation and write-downs (or related reversals) of
inventories, for our Adjusted EBITDA calculation. We believe it is
useful to exclude these items as they are either non-cash expenses,
items that cannot be influenced by management in the short term, or
items that do not impact core operating performance. Excluding
these items does not imply they are necessarily nonrecurring.
Share-based compensation costs are a component of employee
remuneration and can vary significantly with changes in the market
price of the Company’s shares. In addition, other items that do not
impact core operating performance of the Company may vary
significantly from one period to another. As such, Adjusted EBITDA
provides improved continuity with respect to the comparison of our
operating results over a period of time. Our method for calculating
Adjusted EBITDA may differ from that used by other companies.
Adjusted EBITDA(In thousands of
U.S. dollars)
|
Three-month periods ended February, |
|
28, 2021 |
|
29, 2020 |
|
Net loss |
(5,922 |
) |
(4,544 |
) |
Add (deduct): |
|
|
Depreciation and
amortization |
2,185 |
|
2,030 |
|
Finance costs |
1,357 |
|
1,318 |
|
Finance income |
(25 |
) |
(166 |
) |
Income taxes |
6 |
|
- |
|
Share-based compensation |
578 |
|
365 |
|
Write-down of inventories |
- |
|
3 |
|
Adjusted EBITDA |
(1,821 |
) |
(994 |
) |
Conference Call DetailsA
conference call and webcast will be held on April 14, 2021 at 8:30
a.m. (ET) to discuss the results. The call will be hosted by Paul
Lévesque, President and Chief Executive Officer of
Theratechnologies, and other members of the management team.
The conference call can be accessed by dialing
1-844-400-1697 (toll free) or 1-703-736-7400 (International). The
conference call will also be accessible via webcast at
https://edge.media-server.com/mmc/p/yiqvgmdq. Audio replay of the
conference call will be available on the same day starting at 11:30
a.m. (ET) until April 21, 2021, by dialing 1-855-859-2056 (North
America) or 1-404-537-3406 (International) and by entering the
access code: 7982427. The audio replay is also available until
April 14, 2022 on https://edge.media-server.com/mmc/p/yiqvgmdq.
About Theratechnologies
Theratechnologies (TSX: TH) (NASDAQ: THTX) is a biopharmaceutical
company focused on the development and commercialization of
innovative therapies addressing unmet medical needs. Further
information about Theratechnologies is available on the Company's
website at www.theratech.com, on SEDAR at www.sedar.com and on
EDGAR at www.sec.gov
Forward-Looking InformationThis press release
contains forward-looking statements and forward-looking
information, or, collectively, forward-looking statements, within
the meaning of applicable securities laws, that are based on our
management’s beliefs and assumptions and on information currently
available to our management. You can identify forward-looking
statements by terms such as "may", "will", "should", "could",
“would”, "outlook", "believe", "plan", "envisage", "anticipate",
"expect" and "estimate", or the negatives of these terms, or
variations of them. The forward-looking statements contained in
this press release include, but are not limited to, statements
regarding the conduct of our clinical trials with TH1902 and
tesamorelin, the timelines associated to those clinical trials, the
development of a multi-dose pen injector using the F8 formulation,
the growth of our revenues and the value generated from our
commercial and research and development activities.
Although the forward-looking information
contained in this press release is based upon what the Company
believes are reasonable assumptions in light of the information
currently available, investors are cautioned against placing undue
reliance on this information since actual results may vary from the
forward-looking information. Certain assumptions made in preparing
the forward-looking statements include that: the current COVID-19
pandemic will have limited adverse effect on the Company’s
operations; sales of EGRIFTA SV® and Trogarzo® in the United States
will increase over time; the Company’s commercial practices in the
United States and the countries of the European Union will not be
found to be in violation of applicable laws; the long-term use of
EGRIFTA SV® and Trogarzo® will not change their respective current
safety profile; no recall or market withdrawal of EGRIFTA SV® and
Trogarzo® will occur; no laws, regulation, order, decree or
judgment will be passed or issued by a governmental body negatively
affecting the marketing, promotion or sale of EGRIFTA SV® and
Trogarzo® in countries where such products are commercialized;
continuous supply of EGRIFTA SV® and Trogarzo® will be available;
the Company’s relations with third-party suppliers of EGRIFTA SV®
and Trogarzo® will be conflict-free and such third-party suppliers
will have the capacity to manufacture and supply EGRIFTA SV® and
Trogarzo® to meet market demand on a timely basis; no biosimilar
version of EGRIFTA SV® will be approved by the FDA; the Company’s
intellectual property will prevent companies from commercializing
biosimilar versions of EGRIFTA SV® in the United States; Trogarzo®
will be reimbursed in key European countries; the FDA will approve
the F8 formulation and the multi-dose pen injector; the FDA and the
European regulatory agencies will approve a common design for the
Phase 3 clinical trial studying tesamorelin for the treatment
of NASH in the general population; the Company will succeed in
conducting such Phase 3 clinical trial and its Phase 1
clinical trial using TH1902 in various types of cancer; the
Company’s research and development activities using peptides
derived from its oncology platform will yield positive results
allowing for the development of new drugs for the treatment of
cancer; the Company’s European infrastructure is adequate to
commercialize Trogarzo® in Germany and in other European countries;
and the Company’s business plan will not be substantially
modified.
Forward-looking information assumptions are
subject to a number of risks and uncertainties, many of which are
beyond Theratechnologies’ control that could cause actual results
to differ materially from those that are disclosed in or implied by
such forward-looking information. These risks and uncertainties
include, but are not limited to, those related to or arising from:
the adverse impact of the COVID-19 pandemic on (a) the Company’s
sales efforts and sales initiatives, (b) the capacity of the
Company’s suppliers to meet their obligations vis-à-vis the
Company, (c) the Company’s research and development activities, (d)
the health of the Company’s employees and its capacity to rely on
its resources, as well as (e) global trade; the Company’s ability
and capacity to grow the sales of EGRIFTA SV® and Trogarzo®
successfully in the United States and Trogarzo® in Europe; the
Company’s capacity to meet supply and demand for its products; the
market acceptance of EGRIFTA SV® and Trogarzo® in the United States
and of Trogarzo® in Europe; the continuation of the Company’s
collaborations and other significant agreements with its existing
commercial partners and third-party suppliers and its ability to
establish and maintain additional collaboration agreements; the
Company’s success in continuing to seek and maintain reimbursements
for EGRIFTA SV® and Trogarzo® by third-party payors in the United
States; the success and pricing of other competing drugs or
therapies that are or may become available in the marketplace; the
Company’s ability to protect and maintain its intellectual property
rights in EGRIFTA SV® and tesamorelin; the Company’s success in
obtaining reimbursement for Trogarzo® in key European countries,
together with the level of reimbursement, if at all; the Company’s
ability and capacity to commercialize Trogarzo® in Germany and to
launch Trogarzo® in other key countries of the European Union; the
Company’s ability to obtain the approval by the FDA of the F8
formulation and the multi-dose pen injector; the Company’s ability
to obtain an agreement with the FDA for its Phase 3 clinical
trial design studying tesamorelin in the NASH general population;
the Company’s ability to successfully conduct its Phase 3
clinical trial using tesamorelin for the treatment of NASH in the
general population and its Phase 1 clinical trial using TH1902 in
various types of cancer and delays that may occur in the timelines
to complete such trials; the Company’s capacity to acquire or
in-license new products and/or compounds; the discovery of a cure
for HIV; the Company’s expectations regarding its financial
performance, including revenues, expenses, gross margins,
profitability, liquidity, capital expenditures and income taxes;
and the Company’s estimates regarding its capital requirements.
We refer current and
potential investors to the “Risk Factors” section of our Annual
Information Form dated February 24, 2021 available on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov as an exhibit to our
report on Form 40-F dated February 25, 2021 under
Theratechnologies’ public filings. The reader is cautioned to
consider these and other risks and uncertainties carefully and not
to put undue reliance on forward-looking statements.
Forward-looking statements reflect current expectations regarding
future events and speak only as of the date of this press release
and represent our expectations as of that date.
We undertake no obligation to update or revise
the information contained in this press release, whether as a
result of new information, future events or circumstances or
otherwise, except as may be required by applicable law.
For media inquiries:Denis BoucherVice President, Communications
and Corporate Affairscommunications@theratech.com514-336-7800
For investor inquiries:Leah GibsonSenior Director, Investor
Relationsir@theratech.com617-356-1009
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