Theratechnologies (THERF) Q3

Last Thursday Theratechnologies (OTC:THERF) reported Q3 ended August 31.

Revenue of (Canadian) $17.7 million was an increase of 58% YOY. Their new multi-drug resistant HIV drug Trogarzo had its 1st full quarter of sales at $5mil. Sales of their other drug EGRIFTA were $12.9mil, a YOY increase of 15%. They had positive EBITDA of $2.7mil compared to negative EBITDA of $(2mil) for the same quarter last year. Net profit of $367,000 meant nil earnings per share (I guess they couldn’t round up to a penny).

The conference call was direct and upbeat. The CEO reiterated their short-term forecast that the sales run rate of Trogarzo should equal EGRIFTA by the end of the first 12 months on the market (it became commercially available to patients April 30 of this year). Longer term forecast is for Trogarzo sales to be 5 times that of EGRIFTA. 2017 fiscal year sales of EGRIFTA were $43mil. I don’t know if his forecast is based on those figures or the currently about 15% higher numbers.

Trogarzo has coverage now for 69% of all insured lives in the US, and they aim for 80% penetration within the next few months. Medicaid coverage is available in 48 states. The time between writing a prescription and treatment initiation has been reduced from 48 days earlier this year to 20.5 days now.

On the physician front, right now 85% of Trogarzo prescriptions are from 1 doctor for 1 patient. Most likely the specialist begins with his most ill patient and monitors the result to determine if his/her other patients would benefit. Based on the Phase III results they expect these doctors will add their other patients as they experience good success with Trogarzo (bear case fears lack of success and no further patients).

CEO listed the other good news since their last quarterly report:

Trogarzo is now included in the treatment guidelines of the International Antiviral Society. The IAS is a highly credible and reputable organization with a high level of influence among key HIV treating physicians.

Two articles on Trogarzo were published in the New England Journal of Medicine, a highly recognized peer reviewed medical publication.

In Europe, they submitted their application at the end of August, then on September 13th received confirmation from the EMA that the application was valid and placed in the accelerated assessment procedure (shortens review time by 60 days).

The FDA confirmed the target date for the decision on the new EGRIFTA F4 formulation is November 3rd of this year. This formulation reduces by half the volume of injection and does not need refrigeration. Better for the patient and less costly for THERF.

The stock popped 10% on the day of the announcement. However, it had dropped precipitously from its 52 week high on May 25 of $11.25 and now trades at $7.14.

After Q2, I think the market concluded that Trogarzo sales were not ramping up as quickly as expected for a life saving drug. The bear case for the MDR HIV market is that it is small, and the patients are MDR due to non-adherence to oral drugs. The bear expects even less adherence with infusion delivered Trogarzo.

I’m OK with the progress and still hold all my shares. I’ll post again after Q4. Maybe the direction of Trogarzo sales will be clear by then.