Theratechnologies Inc. (Theratechnologies, or the 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 second quarter and first half of fiscal year 2022 ended May
31, 2022. All figures are in U.S. dollars unless otherwise stated.
“This past quarter, we executed on strategic
plans including our decision to focus our sales efforts on the
United States. We also initiated the very promising TH1902 Basket
Trial, while we diligently worked on improving our financial
position. We are pleased with the results of these efforts as our
commercial businesses remain on track to meet our fiscal 2022
guidance which now reflects the shift in focus. Onboarding of our
dedicated commercial field force in the United States has now been
fully completed. Our capital allocation framework continues to
prudently support our investment thesis and ability to generate
long term value,” said Paul Lévesque, President and Chief Executive
Officer. "Despite the challenging environment of the biotech
capital markets, we have successfully extended the financial runway
to support Theratechnologies’ strategic commercial and development
activities. The recently announced transaction with Marathon Asset
Management will allow us to rapidly retire more than half of the
Company’s convertible notes due in 2023 and has significantly
strengthened our balance sheet,” concluded Mr. Lévesque.
Revenue Summary for Second Quarter and
First Half Fiscal 2022 (in thousands of U.S.
dollars)
|
Three months endedMay 31 |
%change |
Six months endedMay 31 |
%change |
|
2022 |
2021 |
|
|
2022 |
2021 |
|
|
EGRIFTA®, EGRIFTA SV® net sales |
11,416 |
10,344 |
10.4 |
% |
23,120 |
19,032 |
21.5 |
% |
Trogarzo® net sales |
7,852 |
7,443 |
5.5 |
% |
14,705 |
14,185 |
3.7 |
% |
Revenue |
19,268 |
17,787 |
8.3 |
% |
37,825 |
33,217 |
13.9 |
% |
RECENT HIGHLIGHTS AND PROGRAM
UPDATES
Pipeline Updates
TH1902 Basket
Trial Update:
Earlier today, the
Company issued an update on the dose escalation portion of the
TH1902 Phase 1 clinical safety study. TH1902 is Theratechnologies’
first-in-human study of its investigational lead peptide drug
conjugate (PDC) for the treatment of sortilin-expressing cancers.
It has received Fast Track designation from the United States Food
and Drug Administration (“FDA”).
A total of 18 heavily
pre-treated patients, who received an average of 8 prior cancer
treatments, were enrolled in the dose escalation portion of the
study. Two of those patients remain on treatment. Following the
safety observations at 420 mg/m2 including grade 3 neuropathy,
grade 4 neutropenia, grade 3 ocular changes (visual acuity,
keratitis and ocular surface dryness) and grade 2 skin toxicities
(rash, pruritis and inflammation), the dose of TH1902 was decreased
to 300 mg/m2 for the next dose level and was expanded to a total of
6 patients. No Dose Limiting Toxicities were observed during the
first cycle, therefore, the dose of 300 mg/m2 was selected for
continuation of the basket part of the study. In addition, the
levels of free docetaxel are low, at only 11% of those observed at
docetaxel treatment dosage of 75 mg/m2. Thus far 300 mg/m2 appears
to be a well-tolerated dose level, which continues to be evaluated
in the larger basket portion of the TH1902 study.
Signs of efficacy
have been observed in three heavily pretreated patients in the dose
escalation trial, and recorded results include:
- Confirmed partial response in one
prostate cancer patient with 53% overall reduction in target
lesions after three cycles of TH1902 at 300 mg/m2, PSA continued to
progress.
- Stabilized disease observed in a
prostate cancer patient with measurable reduction in target lesion
sizes (single digit percentages), including one PSA response. The
patient was treated with mixed cycles of TH1902 from 420 mg/m2 to
300 mg/m2.
- Stabilized disease observed in an
endometrial cancer patient with measurable reduction in target
lesion sizes (single digit percentages). Notably, she received a
total of 11 cycles. Her dose was escalated from 60 mg/m2 to
360 mg/m2.
In an effort to
optimize and ensure success of this clinical research program, the
company has enrolled six active trial sites across the United
States, including Cedars-Sinai in California, Karmanos Cancer
Institute and START Midwest in Michigan, Pennsylvania Cancer
Specialists Research Centre, Mary Crowley Cancer Research and
University of Texas MD Anderson Cancer Center, both in Texas.
TH1902 China
Out-licensing and Partnership Strategy:
Out-licensing development and commercialization rights for TH1902
in Greater China continues. Discussions are moving forward with an
expanding number of potential partners.
EGRIFTA
SV® Human Factors Study:
Following complaints received from patients relating to the
reconstitution of EGRIFTA SV® after its launch in
2019, we have submitted an amendment to the Instructions For Use
(“IFU”s) included in the EGRIFTA SV® Patient
Information in March 2021, and per the timelines set forth in the
regulation, we implemented these changes, which included amended
IFUs. We also provided patients with detailed training through our
call center, Thera Patient Support®, related to
that change and the number of complaints have since been reduced to
almost nil. The FDA responded to our amendment with a Complete
Response Letter, asking the Company to carry out a Human Factors
Study (“HFS”) to ensure that patients reconstitute the product in
the proper manner. We have recently initiated such study, which we
believe will be carried out to the FDA’s satisfaction, within their
imposed timeframe of one year.
F8 sBLA
filing: As previously announced, our intention was to file
a supplemental Biologic License Application (“sBLA”) for the F8
formulation by the end of the first quarter of calendar 2022.
Currently, the issue around the global supply for bacteriostatic
water for injection (“BWFI”) required for the reconstitution of the
F8 formulation, has not been resolved. As per the FDA website, the
estimated recovery of supply of BWFI is scheduled for October
2022.
In addition, since
the FDA has asked us to perform an HFS for the reconstitution of
EGRIFTA SV®, we have proactively decided to carry
out such a study before filing the sBLA for the F8 formulation. As
such, we will be filing the sBLA for the F8 once we have consistent
sourcing of the BWFI and completed the HFS.
NASH: After internal discussions and further risk
assessments on this program, in order to further de-risk the Phase
3 trial, the Company has submitted an amended protocol to the FDA.
The new protocol will include a Phase 2b/3 seamless study design
where the first 350 or so patients’ data will be analyzed by a data
monitoring committee to assess the efficacy of tesamorelin on a
smaller subset of patients. This amended protocol will allow us to
generate hard end point data on NAS score and fibrosis. A decision
will then be made whether to continue the study until full number
of patients (1,094) have completed 18 months of treatment. The FDA
has agreed to this redesigned protocol.
The NASH program is
still on pause pending resolution on the F8 formulation and finding
of a partner with resources and capabilities. We continue to have
discussions with potential NASH partners and are encouraged to see
renewed NASH interest with recent industry partnership
announcements.
VAMOS
Study: The Company continues its study titled Visceral
Adiposity Measurement and Observation Study (“VAMOS”) to reflect
our commitment to improve the health outcomes of people living with
HIV. VAMOS is an epidemiologic cross-sectional study to answer
the unknown associations between visceral fat and cardiovascular
disease risk, liver fat, liver fibrosis, pericardial fat, and
muscle fat in HIV patients.
These associations
are being measured across a diversity of weights, BMIs, genders,
and races so that the impact of visceral fat can be understood with
external validity to the results. Additionally, the performance of
anthropometric measurements like waist circumference and hip
circumference are being assessed in a modern HIV population. The
aim of the study is two-fold: (1) to determine the utility of WC’s
ability to predict cardiovascular risk scores, liver fat, liver
fibrosis, and abnormal glucose homeostasis across the full VAMOS
population and subgroups; and (2) to identify common clinical data
points in today’s standard of care that can be used to assess a
patient’s risk of having excess visceral fat. The VAMOS study
results are expected to direct clinicians on why and which patients
in their practice should be screened for excess visceral fat and
treatment.
Trogarzo® Lifecycle
Management: An sBLA was filed with the FDA in the fourth
quarter of 2021 for the Company’s Intravenous (“IV”) Push mode of
administration of Trogarzo® for the treatment of human
immunodeficiency virus type 1 (“HIV-1”). The FDA has accepted our
filing and has provided a target action date of October 3, 2022, in
accordance with the Prescription Drug User Fee Act (“PDUFA”).
Theratechnologies and TaiMed are also evaluating an intramuscular
(“IM") mode of administration for Trogarzo® within the TMB-302
study. This trial is now fully enrolled, and we expect completion
of the study in the second half of 2022.
Corporate and
Commercial Updates
Binding
Commitment for a Non-Dilutive Term Loan of up to $100
Million: On July 13, 2022, the Company announced it
received a binding commitment letter with respect to a non-dilutive
term loan with Marathon Asset Management for up to $100 million.
The term loan will make it possible to buy back and cancel $30
million principal amount of convertible notes due June 2023,
through private agreements with certain US noteholders.
Commercialization Activities Focused on the United
States: The Company has decided to focus its
commercialization activities in the United States and, as a result,
will cease its Trogarzo® commercialization operations in Europe. A
notice of termination was sent to TaiMed Biologics Inc. (“TaiMed”)
and will return the European commercialization rights to Trogarzo®
to TaiMed by the end of October 2022.
CQDM provides
new cancer research grant: The CQDM – a
Quebec biopharmaceutical research consortium - has provided a new
cancer research grant to validate the anti-metastatic potential of
TH1902. The CQDM together with the Quebec Breast Cancer Foundation
and Mitacs announced close to 1 million Canadian dollars for a new
research project at l’Université du Québec à Montréal focused on
several metastatic cancer models. This public-private partnership
complements Theratechnologies’ annual investment in the development
of our targeted oncology platform in breast cancer and could
increase the spectrum of cancer patients who might ultimately
benefit from this new therapy. This new sum will further expand our
knowledge in advanced metastatic breast cancer.
2022 Revised
Revenue Guidance
Fiscal year 2022
revenue guidance tightened to be in the range of $79 million - $82
million, or growth of the commercial portfolio to be in the range
of 13% and 17%, as compared to the 2021 fiscal year. The
adjustments reflect our updated expectations from Europe, as
announced earlier in the quarter and first half results.
Second Quarter Fiscal 2022 Financial
ResultsThe financial results presented in this press
release are taken from the Company’s Management's Discussion and
Analysis (MD&A) and our unaudited consolidated financial
statements as at May 31, 2022 (Second Quarter Fiscal 2022)
which have been prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). The MD&A and the Unaudited
Financial Statements can be found at www.sedar.com, on EDGAR
at www.sec.gov and at www.theratech.com. Unless
specified otherwise, all amounts in this press release are
in U.S. dollars and all capitalized terms have the
meaning ascribed thereto in our MD&A.
Revenue
For the three- and
six-month periods ended May 31, 2022, consolidated revenue was
$19,268,000 and $37,825,000, compared to $17,787,000 and
$33,217,000 for the same periods ended May 31, 2021, representing a
year-over-year increase of 8.3% and 13.9%, respectively.
For the second quarter
of fiscal 2022, net sales of EGRIFTA SV® were $11,416,000 compared
to $10,344,000 in the second quarter of fiscal 2021, representing
an increase of 10.3% year-over-year. Net sales for the six-month
period ended May 31, 2022, were $23,120,000 compared to $19,032,000
in the same period in 2021. Higher EGRIFTA SV® sales are the result
of increased unit and a higher net selling price per
unit.
Trogarzo® net sales in
the second quarter of fiscal 2022 amounted to $7,852,000 compared
to $7,443,000 for the same quarter of 2021, representing an
increase of 5.5% year-over-year. For the six-month period ended May
31, 2022, Trogarzo® net sales were $14,705,000 compared to
$14,185,000 in the same period in 2021. Higher sales of Trogarzo®
were a result of a stronger performance in the United States, where
we recorded 14% growth compared to the same quarter of last year,
and were hampered by lower sales in Europe, as a result of a weaker
overall pricing environment.
Cost of Sales
For the three- and
six-months ended May 31, 2022, cost of sales increased to
$8,979,000 and $15,078,000 compared to $5,934,000 and $11,345,000
for the same periods in fiscal 2021, primarily due to an increase
in other production related costs.
Cost of goods sold was
$7,759,000 and $12,637,000 in the three- and six-month periods of
2022 compared to $4,714,000 and $8,904,000 for the same periods in
2021. The increase in cost of goods sold was mainly due to a
charge arising from the non-production of scheduled batches of
EGRIFTA SV® that were cancelled due to the planned transition to
the F8 formulation of tesamorelin. Cost of goods sold was also
impacted by higher sales of both EGRIFTA SV® and Trogarzo®.
Cost of sales also
included the amortization of the other asset of $1,220,000 in both
Q2 fiscal 2022 and Q2 fiscal 2021, and of $2,441,000 for the
six-month periods of 2022 and 2021.
R&D Expenses
R&D expenses in
the three- and six-month periods ended May 31, 2022, amounted to
$11,056,000 and $19,059,000 compared to $6,417,000 and $11,300,000
in the comparable periods of fiscal 2021.
The increases in both
periods were largely due to higher spending related to the ongoing
Phase 1 trial of TH1902. In 2022, we have also initiated important
studies related to medical education and follow-up studies in the
HIV field. Increased spending in R&D is also related to the
on-going trial evaluating the intra-muscular form of administration
of Trogarzo®.
Selling Expenses
Selling expenses
increased to $15,371,000 and $23,178,000 for the three- and
six-month periods ended May 31, 2022, compared to $6,901,000 and
$13,059,000 for the same periods last year. The increase is
due in part to one-time costs related to setting up of our internal
field force in the United States, as well as spending on new
initiatives implemented in 2022 to increase awareness of our
products on the North American market.
The amortization of
the intangible asset value for the EGRIFTA SV® and Trogarzo®
commercialization rights is also included in selling expenses. As
such, we recorded expenses of $7,102,000 and $7,897,000 for the
three- and six-month periods ended May 31, 2022, compared to
$795,000 and $1,590,000 in 2021. The increase is related to the
accelerated amortization of the Trogarzo® commercialization rights
for the European territory following our decision to cease
commercialization activities in that territory in Q2 2022.
General and Administrative
Expenses
General and
administrative expenses in the three- and six-month periods ended
May 31, 2022, amounted to $4,823,000 and $9,191,000 compared to
$3,884,000 and $7,446,000 reported in the comparable periods of
fiscal 2021. The increase in General and Administrative expenses is
largely due to increased overall business activities in 2022
compared to 2021, as well as key hires in North America to support
the implementation and management of our internal field force in
the United States.
Net Finance Costs
Net finance costs for
the three- and six-month periods ended May 31, 2022, were
$1,644,000 and $2,929,000 compared to $1,023,000 and $2,355,000 for
the comparable periods of 2021. Net finance costs in the second
quarter of 2022 and 2021 included interest of $833,000 ($1,635,000
in the corresponding six-months periods) on the senior convertible
notes issued in June 2018.
Net finance costs for
the three- and six-month periods ended May 31, 2022, also included
accretion expense of $544,000 and $1,061,000, compared to $608,000
and $1,189,000 for the comparable periods in 2021.
Net Loss
Given the increase in
revenue and the increased expenses and the impairment of the
Trogarzo® commercialization rights for the European Territory, net
loss for the three- and six-month periods ended May 31, 2022,
amounted to $22,727,000 and $31,759,000, compared to $6,392,000 and
$12,314,000, for the same periods last year.
Liquidity and Financial
Position
We ended the second
quarter of fiscal 2022 with $32,491,000 in cash, bonds and money
market funds. The Company believes that its cash position and
future operating cash flows will be sufficient to finance its
operations and capital needs for at least the next 12 months from
the consolidated statement of financial position date. Furthermore,
subsequent to May 31, 2022, (please refer to the Subsequent Events
section in the MD&A for details) the Company secured a new
financing.
For the three-month
period ended May 31, 2022, cash flows used by operating activities
were $11,736,000 compared to $2,812,000 in the same period of
fiscal 2022.
In the second quarter
of fiscal 2022, changes in operating assets and liabilities had a
positive impact on cash flow of $10,589,000 (2021- $2,096,000).
These changes were mostly attributable to positive impacts from
lower accounts receivable ($1,077,000) and prepaid expenses
($1,097,000), and higher accounts payables and accrued liabilities
($7,095,000).
Conference Call Details
A conference call will be held on July 14, 2022
at 8:30 a.m. (ET) to discuss the results and recent business
updates. The call will be hosted by Paul Lévesque, President and
Chief Executive Officer. Joining Mr. Lévesque on the call will be
other members of the management team, including Chief Financial
Officer Philippe Dubuc and Chief Medical Officer Christian
Marsolais, who will be available to answer questions from
participants following prepared remarks.
Participants are encouraged to join the call ten
minutes in advance to secure access.
Conference call dial-in and replay information
is below:
CONFERENCE CALL INFORMATION |
Conference Call Date: |
July 14, 2022 |
Conference Call Time: |
8:30 AM ET |
North America Dial-in: |
1- 877-513-4119 |
International Dial-in: |
1- 412-902-6615 |
Access Code: |
5742327 |
CONFERENCE CALL REPLAY |
North America Dial-in: |
1- 877-344-7529 |
International Dial-in: |
1- 412-317-0088 |
Replay Access Code: |
7192794 |
Replay End Date |
July 21, 2022 |
The live conference call will be accessible via webcast
at:https://edge.media-server.com/mmc/p/98pvag4g.
An archived webcast will also be available on the Company’s
Investor Relations website under ‘Past Events’.
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 Information
This 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",
“promising”, “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 availability of the term loan, our
forecasted revenues for the 2022 full fiscal year, the conduct of
our clinical trials with TH1902, the timelines associated with the
completion of the HFS, with the filing of an sBLA with the FDA for
the F8 formulation and the IM mode of administration study using
Trogarzo®, and our discussions with potential partners in NASH and
in Greater China for our oncology platform.
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 Company will meet all the terms and
conditions of the term loan; 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 the United States; 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; the FDA
will approve the IV Push mode of administration of Trogarzo® by the
target action date of October 3, 2022; the Company will succeed in
finding a commercial partner in Greater China for its oncology
platform and for its NASH program; the timelines associated with
the completion of the HFS, the filing of an sBLA with the FDA for
the F8 formulation and the completion of the IM mode of
administration for Trogarzo® will be met; 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: non-compliance by the
Company with the terms and conditions of the term loan; the
occurrence of an event of default under the term loan triggering
the accelerated reimbursement of any outstanding drawn down
amounts; the Company’s ability and capacity to grow the sales of
EGRIFTA SV® and Trogarzo® successfully in the United States; the
Company’s capacity to meet supply and demand for its products; the
market acceptance of EGRIFTA SV® and Trogarzo® in the United
States; 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 ability to successfully meet the
timelines set forth herein; the discovery of a cure for HIV; the
Company’s failure to meet the terms and conditions set forth in the
credit agreement resulting in an event of default and preventing
the Company from accessing the full amount of the term loan; 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 23, 2022, 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 24, 2022, 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.
Investor inquiries:Elif McDonaldSenior Director, Investor
Relationsir@theratech.com1-438-315-8563
Media inquiries:Julie
SchneidermanSenior Director, Communications & Corporate
Affairscommunications@theratech.com1-514-336-7800
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