Theratechnologies, Inc. (Theratechnologies, or Company) (TSX: TH)
(NASDAQ: THTX), a biopharmaceutical company focused on the
development and commercialization of innovative therapies, today
reported financial results for the second quarter ended May 31,
2021 (Q2 Fiscal 2021) and provided an update on its planned Phase 3
clinical trial evaluating tesamorelin for the treatment of
nonalcoholic steatohepatitis (NASH).
Second-Quarter 2021 Revenues
(in thousands of U.S. dollars)
|
Three Months Ended |
% change |
|
May 31, 2021 |
May 31, 2020 |
|
EGRIFTA®, EGRIFTA SV® net sales |
10,344 |
9,269 |
12% |
Trogarzo® net sales |
7,443 |
7,893 |
-6% |
Revenue |
17,787 |
17,162 |
4% |
The Company also
announced that discussions with the U.S. Food and Drug
Administration (FDA) and the European Medicines Agency (EMA)
regarding its proposed trial design and protocol for its Phase 3
clinical trial evaluating tesamorelin for the treatment of NASH are
complete. In addition, the Company has initiated a search for a
potential partner to help launch the program.
“The first half of
2021 has been marked by progress across our R&D pipeline of
novel compounds. Our Phase 1 clinical trial of TH1902 for the
treatment of sortilin-expressing cancers progressed as planned
during the quarter and we believe that we have developed a targeted
peptide-drug conjugate that may potentially transform the way
cancer is treated. In NASH, we concluded regulatory discussions in
the U.S. and EU and now have a ready-to-proceed Phase 3 clinical
trial design,” said Paul Lévesque, President and Chief Executive
Officer, Theratechnologies.
Update on Phase 3 clinical trial
evaluating tesamorelin in NASH
- Discussions
with the FDA and the EMA on the trial design are complete.
- The Phase 3
clinical trial will include participants in the U.S. and
Europe.
- The Phase 3
clinical trial will be a multicenter, double-blind,
placebo-controlled two-part study to evaluate the safety and
efficacy of tesamorelin in liver-biopsy confirmed patients with NAS
score of at least 4 and stage 2 or 3 fibrosis.
- The Phase 3
clinical trial will include a futility analysis that will be
performed after approximately 400 patients have completed 18 months
of treatment and have received a second liver biopsy.
- A supplemental
Biologics Licence Application (sBLA) is expected to be filed after
approximately 1,100 patients, including approximately 75 to 100
people living with HIV, have completed 18 months of treatment and
have received a second liver biopsy.
- The primary
endpoint will be NASH resolution and no worsening of fibrosis
compared to placebo after 18 months as per FDA guidelines.
- Following
potential approval, an additional 1,800 patients are expected to be
enrolled, to continue measuring clinical outcomes over a period of
five years.
- Based on regulatory discussions,
the final Phase 3 clinical trial design will result in higher costs
than what the Company had previously estimated.
- As a result of the total cost of
the Phase 3 clinical trial, the Company is now evaluating its
options to best execute its late-stage development program,
including seeking a potential partner.
- An external
U.S.-based biopharma advisory firm has been retained to assist in
identifying a potential partner.
- Partner
identification and negotiations will alter the initiation of the
Phase 3 clinical trial that was previously expected to begin in the
third quarter of calendar year 2021.
“Given the additional resources required to
conduct the Phase 3 clinical trial in NASH, we are evaluating
opportunities that will allow us to most effectively execute this
program, including seeking a potential partner for late-stage
development. While this will alter the planned timing of the Phase
3 clinical trial initiation, finding a strong partner could
potentially add additional resources and capabilities that will be
of great value as we advance this exciting program toward a
potential approval,” added Mr. Lévesque.
Update on
SORT1+ Technology in oncology
- New
preclinical findings for TH1902 in metastatic cancers: On
June 21, 2021, the Company announced new preclinical in vivo
findings on the anti-metastatic effect and tolerability of its
novel investigational proprietary peptide-drug conjugate (PDC),
TH1902. These results demonstrated that TH1902 had better
anti-metastatic activity when compared to docetaxel alone when
administered at an equimolar concentration in a lung metastasis
cancer model expressing the sortilin (SORT1) receptor. In
conjunction with the announcement, the Company hosted a webinar on
its SORT1+ Technology™ featuring Richard Béliveau, Ph.D.,
Université du Québec à Montréal, who discussed the science of
receptor-mediated cancer therapy and the discovery of sortilin as a
novel target in cancer treatment. The archived webcast event can be
accessed on the Theratechnologies website under ‘Past
Events’.
- Phase 1
clinical trial of TH1902 for the treatment of sortilin-expressing
cancers progressing: Following fast track designation from
the FDA, the Phase 1 clinical trial evaluating TH1902 in
sortilin-expressing solid tumors is progressing as
planned. At this time, the Company expects to obtain
interim safety and efficacy information from the Phase 1 Part A
study in the fourth quarter of calendar year 2021.
Key talent
recruitment
- New member of Board of
Directors: The Company welcomed Frank Holler
as a new independent member to its Board of Directors. Mr. Holler
brings extensive knowledge and experience in North American capital
markets and has a well-established track record in the
biotechnology industry.
- Human Resources
Leader: Theratechnologies announced that Mr.
André Dupras joined the Company as Vice President, Human Resources.
Mr. Dupras brings more than 25 years of experience in talent
recruitment and development to the Company, and he will play a
pivotal role in building and retaining an industry-leading team to
support Theratechnologies’ commercial and R&D growth.
- Business development
management: The Company welcomed Daniel Böck as Senior
Director of Business and Corporate Development. Mr. Böck will lead
efforts to support the Company’s commercial and R&D strategic
partnerships and alliances within the life sciences industry.
Second-Quarter Fiscal 2021 Financial
Results
RevenueFor the three- and
six-month periods ended May 31, 2021 consolidated revenue was
$17,787,000 and $33,217,000, compared to $17,162,000 and
$32,881,000 for the same periods ended May 31, 2020, representing a
year-over-year increase of 4% and 1%, respectively.
For the second quarter of fiscal 2021, net
sales of EGRIFTA SV® were $10,344,000 compared to $9,269,000 in the
second quarter of fiscal 2020, representing an increase of 12%
year-over-year. Net sales for the six-month period ended May 31,
2021 were $19,032,000 compared to $17,784,000 in the same period in
2020. While unit sales of EGRIFTA SV® were relatively flat compared
to the same period in 2020, net sales increased due to a higher
selling price and lower rebates to government payers.
Trogarzo® net sales in the second quarter of
fiscal 2021 amounted to $7,443,000 compared to $7,893,000 for the
same quarter of 2020, representing a decrease of 6% year-over-year.
For the six-month period ended May 31, 2021, Trogarzo® net sales
were $14,185,000 compared to $15,097,000 in the same period in
2020. Lower sales of Trogarzo® were a result of a decrease in unit
sales, the effect of the ongoing COVID-19 pandemic resulting in the
difficulty for patients to visit health care facilities to meet
with physicians and obtain their intravenous infusion, competitive
pressures and higher rebates, and were partially offset by a higher
selling price. Net sales of Trogarzo® in the comparative period
were positively impacted by unusually large orders by pharmacies at
the beginning of the COVID-19 pandemic in March 2020.
Cost of SalesFor the three- and
six-months ended May 31, 2021, cost of sales decreased to
$5,934,000 and $11,345,000 compared to $7,380,000 and $14,141,000
for the same periods in fiscal 2020, primarily due to the decrease
in cost of goods sold. Cost of goods sold was $4,714,000 and
$8,904,000 in the three- and six-month periods of 2021 compared to
$5,769,000 and $11,169,000 for the same periods in 2020.
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
$1,220,000 in both Q2 fiscal 2021 and Q2 fiscal 2020, and of
$2,441,000 for the six-month periods of 2021 and 2020.
R&D ExpensesR&D
expenses in the three- and six-month periods ended May 31, 2021
amounted to $6,417,000 and $11,300,000 compared to $3,622,000 and
$7,041,000 in the comparable periods of fiscal 2020.
The increases in both periods were largely due
to higher spending related to the initiation of the Phase 1 trial
in oncology and spending related to the NASH program (including
spending on the new F8 formulation of tesamorelin), increased
spending in medical and patient education, and increased medical
affairs spending in Europe.
Selling ExpensesSelling
expenses were relatively stable and amounted to $6,901,000 and
$13,059,000 for the three- and six-month periods ended May 31, 2021
compared to $6,941,000 and $13,302,000 for the same periods last
year.
General and Administrative
ExpensesGeneral and administrative expenses in the three-
and six-month periods ended May 31, 2021 amounted to $3,884,000 and
$7,446,000 compared to $3,706,000 and $6,276,000 reported in the
comparable periods of fiscal 2020. The increase in General and
Administrative expenses is largely due to increased overall
business activities in 2021 compared to 2020.
Finance IncomeFinance income,
consisting of interest income and foreign exchange gains, for the
three- and six-month periods ended May 31, 2021 was $432,000 and
$481,000 compared to $80,000 and $246,000 in the comparable periods
of fiscal 2020. Interest income for the three- and six-month
periods ended May 31, 2021 was $54,000 and $79,000, respectively,
compared to $80,000 and $246,000 in the comparable periods of
fiscal 2020. Lower interest income was due in large part to a
decreased liquidity position and a decrease in interest rates. We
also recorded a foreign exchange gain of $378,000 and $402,000 in
the three- and six-month periods ended May 31, 2021.
Finance CostsFinance costs for
the three- and six-month periods ended May 31, 2021 were $1,455,000
and $2,836,000 compared to $1,399,000 and $2,717,000 in the
comparable periods of fiscal 2020. Finance costs in the three- and
six-month periods ended May 31, 2021 mostly represent interest of
$833,000 and $1,635,000, respectively on the senior convertible
notes issued in June 2019, compared to $842,000 and $1,644,000 for
the same periods last year.
Adjusted EBITDAAdjusted EBITDA
for the three- and six- month periods ended May 31, 2021 was
$(2,616,000) and $(4,437,000) compared to $(1,533,000) and
$(2,527,000) in the comparable periods of fiscal 2020. See
“Non-IFRS Financial Measures” below.
Net lossTaking into account the
revenue and expense variations described above, net loss for the
second quarter of fiscal 2021 was $6,392,000, or $(0.07) per share,
and a net loss of $12,314,000, or $(0.14) per share, for the
six-month period ended May 31, 2021 compared to a net loss of
$5,806,000, or $(0.08) per share, in the three months ended May 31,
2020 and a net loss of $10,350,000, or $(0.13) per share, compared
to the six-month period ended May 31, 2020.
Financial PositionAt period-end
May 31, 2021, the Company had $56,714,000 in cash, bonds and money
market funds, and remained virtually unchanged from February 28,
2021. At this time, the current cash, bonds and money market funds
are sufficient to fund the Company’s operations to meet its current
obligations for at least the next twelve months.
For the three-month period ended May
31, 2021, operating activities used cash of $716,000 compared
to $3,100,000 in the comparable period of fiscal 2020,
primarily due to the positive impact of changes in operating assets
and liabilities, partially offset by the increased loss in
2021.
In the second quarter of fiscal 2021,
changes in operating assets and liabilities had a positive impact
on cash flow of $2,096,000 (2020-negative impact of $1,561,000).
These changes were mostly due to a positive impact from accounts
payables and accrued liabilities, provisions, trade and other
receivables as well as prepaid expenses and deposits and were
negatively impacted by inventories.
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 May 31, |
Six-month periods ended May
31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Net loss |
(6,392 |
) |
(5,806 |
) |
(12,314 |
) |
(10,350 |
) |
Add (deduct): |
|
|
|
|
Depreciation and
amortization |
2,185 |
|
2,109 |
|
4,370 |
|
4,139 |
|
Finance costs |
1,455 |
|
1,399 |
|
2,836 |
|
2,717 |
|
Finance income |
(432 |
) |
(80 |
) |
(481 |
) |
(246 |
) |
Share-based compensation |
548 |
|
454 |
|
1,126 |
|
819 |
|
Income taxes |
20 |
|
- |
|
26 |
|
- |
|
Write-down of inventories |
- |
|
391 |
|
- |
|
394 |
|
Adjusted EBITDA |
(2,616 |
) |
(1,533 |
) |
(4,437 |
) |
(2,527 |
) |
Conference Call DetailsA
conference call and webcast will be held on July 15, 2021 at 8:30
a.m. (ET) to discuss the second quarter 2021 results and recent
business highlights. 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 here. An audio
replay of the conference call will be available on the same day
starting at 11:30 a.m. (ET) until July 22, 2021, by dialing
1-855-859-2056 (North America) or 1-404-537-3406 (International)
and by entering the access code: 7943345. 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 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 the Phase 1 clinical trial
using TH1902, the filing of an sBLA evaluating tesamorelin for the
treatment of NASH with the FDA, the potential approval by
regulatory agencies of tesamorelin for the treatment of NASH, the
development of a multi-dose pen injector using the F8 formulation,
the growth of our revenues, the value generated from our commercial
and research and development activities, and the potential benefits
to be derived from the addition of a partner for our Phase 3
clinical trial evaluating tesamorelin for the treatment of
NASH.
Although the Forward-Looking Statements
contained in this press release are based upon what the Company
believes are reasonable assumptions in light of the information
currently available, investors are cautioned against placing undue
reliance on these statements since actual results may vary from the
Forward-Looking Statements. 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 and its business plan; 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
relationships 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 Company
will succeed in pursuing the conduct of its Phase 1 clinical trial
using TH1902; the Company will be able to secure additional
resources to initiate its Phase 3 clinical trial evaluating
tesamorelin for the treatment of NASH; 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.
In addition, the Company assumes that the
totality of evidence and data resulting from the conduct of its
Phase 3 clinical trial evaluating tesamorelin for the treatment of
NASH will demonstrate substantial evidence of efficacy and will be
highly persuasive to the FDA given that the Company (i) has not
conducted a Phase 2 clinical trial evaluating tesamorelin in the
general population suffering from NASH prior to proceeding with its
Phase 3 clinical trial as the FDA and EMA recommended; and (ii) is
conducting one Phase 3 clinical trial as opposed to two. The
Company also assumes that it will be successful in obtaining
approval from the EMA for tesamorelin in the treatment of NASH
based on the results obtained from its Phase 3 clinical trial
despite the Company not following the current guidelines issued by
the EMA for the approval of a drug for the treatment of NASH, which
guidelines provide for both (i) NASH resolution and no worsening of
fibrosis and (ii) improvement of fibrosis by one stage without
worsening of NASH as a primary endpoint, whereas for the purposes
of meeting the FDA’s primary endpoint, only NASH resolution and no
worsening of fibrosis will be relevant.
Forward-Looking Statements 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 Statements. 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 secure additional resources to initiate its Phase 3 clinical
trial evaluating tesamorelin for the treatment of NASH; the
Company’s ability to successfully conduct its Phase 3 clinical
trial using tesamorelin for the treatment of NASH and its Phase 1
clinical trial using TH1902 in various types of cancer; the
Company’s ability to find a partner on terms satisfactory to the
Company; 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.
In addition to the risks inherent to the conduct
of clinical trials, there exist risks that the FDA will not approve
tesamorelin for the treatment of NASH without the Company having
substantial evidence and data from the conduct of Phase 2 clinical
trials evaluating tesamorelin for the treatment of NASH in the
general population and solely relying on data emanating from the
conduct of one Phase 3 clinical trial. There is also risk that the
FDA may require additional clinical trials to be conducted in order
to obtain approval. Moreover, there exist risks that the EMA will
not approve tesamorelin for the treatment of NASH because the trial
design that the Company intends to pursue does not include the
primary endpoint required under the current EMA guidelines.
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 for additional risks related to
the Company. 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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