ENDO 2012: Byron Capital analyst Douglas Loe remains positive on Theratechologies

Byron Capital healthcare analyst Douglas Loe says data coming out of ENDO, the Endocrine Society conference that wrapped up yesterday in Houston, is incongruous with the Theratechnologies E.U. regulatory challenges.

ENDO, the annual meeting of The Endocrine Society wrapped up its 2012 session in Houston yesterday. Out of the conference may have come some decent news for beleaguered shareholders of Theratechnologies (TSX:TH)

Shares of Theratech on the TSX were more than halved last Friday, falling from $1.90 to a mere $.74 cents after the company reported that it was informed by its European commercial partner Ferrer Internacional SA, that it would withdraw the marketing authorization application with the European Medicines Agency for Egrifta, Theratech’s tesamorelin treatment for excess abdominal fat in HIV-infected patients with lipodystrophy.

Byron Capital Healthcare analyst Douglas Loe, in a report to clients following the announcement, said the news was awful and slashed his target on Theratech to $1 from his previous $6.50.

Today, however, Loe says data coming out of the conference, which was already incongruous from a regulatory point of view, is even more so now. Loe says Theratechnologies and its collaborators at Massachusetts General Hospital reported positive Phase II data that met Loe’s expectations by “…materially reducing visceral adipose tissue in growth hormone deficient obese subjects, just as it does in HIV subjects.”

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Loe says he is encouraged to see “that tesamorelin worked as intended to safely reduce VAT in a new patient population, with none of the CV or metabolic side effects that seem to be concerning E.U. regulators.” He says this justifies more comprehensive Phase II obesity studies. The Byron analyst says he is still positive on tesamorelin, even in light of the regulatory challenges posed by the EU. Loe says at least as much attention should be paid to Phase III HIV lipodystrophy testing, which was published in 2010 in the Journal of Clinical Endocrinology & Metabolism, that supported FDA approval and the “unanimously positive FDA Advisory Panel vote that preceded it.”

In a research update to clients today, Loe reiterated his HOLD rating and $1 twelve-month target on Theratechnologies. Shares of the company on the TSX closed today up 9.1% to $.84 cents.

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