Thera Q2 2018

Theratechnologies had their 1st earnings report after March 6 FDA approval of Trogarzo, their multi-drug resitant HIV-1 drug. So our 1st snapshot of how the drug rollout is doing. The drug became commercially available on April 30th.

Trogarzo sales in May and June totaled C$1,186,000 or US$924,000. The number of patients has reached 200. We can’t really project from this initial 2-month result how many of the estimated 25,000 multi-drug resistant patients in the USA will become Trogarzo users. But conference call comments from the CEO Luc Tanquay give some color.

He noted that the number of prescriptions is about equal to the number of prescribing physicians. “In our earlier market studies, many physicians have mentioned that they wanted to gain clinical experience with one or two patients to get more familiar with the product, and this is exactly what we are seeing now.” If the 1st patient or 2 respond well, the expectation is that these specialist doctors will write prescriptions for their other patients.

Prescriptions are coming from all over the U.S. and not just from a few large urban centers.

When a call comes into the Thera call center, Thera works to obtain insurance coverage and so far 89% of scripts have been approved, and none definitively rejected (they are still working with the payer to get approval). “Such early traction can only happen with public and private reimbursement. And in fact, only four months after receiving FDA approval, payment policies among private and public insurers addressed 48% of covered lives in the U.S.” They expect to have “optimal coverage policies” in place for Trogarzo in another 2-3 months (I don’t know what % of covered lives that would be). Nationally it’s covered by Medicare, many states like California for Medicaid, and private insurers like Kaiser.

Then to wrap up company-wide Q2 results:

Record second quarter net sales of $C12.3 million, up 23.1% from the same quarter last year. Sales of their other HIV drug EGRIFTA were up 11.2% (16.7% in US currency). Net loss was $2.46 million or $0.03 per share, compared to $9.1 million or $0.12 per share for the same quarter last year. They expect to quickly return to positive EBITDA due to Trogarzo sales. They have $C24 million in cash.

That’s all for now. I brought THERF to the board on July 26, 2017 and the stock price has gone from (US$) $6.25 to $9.43. It wasn’t a typical Saul-board type stock, but Kite’s inclusion on the board convinced me to introduce it. Let’s check in after Q3 when they have a full quarter of Trogarzo sales and again after Q4 when they could be really gaining some traction. A year’s treatment cost US$117,000. The WAC or wholesale acquisition cost is US$82k, and Thera receives 48% of that net (52% to their partner and drug developer Taimed.