Mackie Research raises price target on Theratechnologies

Some good news on a treatment that he expects will become very important to its balance sheet has Mackie Research Capital analyst André Uddin raising his price target on Theratechnologies (Theratechnologies Stock Quote, Chart, News: TSX:TH).

Uddin points out that the ID Week abstract for ibalizumab, a treatment for multi-drug resistant HIV patients, was just released and he believes the results point to it soon becoming the standard of care for multi-drug resistant HIV patients. He notes that the drug was well tolerated and demonstrated statistically significant viral load reductions compared to control in mulit-drug resistant MDR HIV patients when added to a failing regimen.

The analyst expects ibalizumab will soon join Theratech’s HIV lipodystrophy drug, Egrifta, as a moneymaker.

“Catalysts Abound for ibalizumab,” says Uddin. “Egrifta continues to provide a solid revenue base for TH to build upon. We believe the reason for owning the stock is for the growth potential surrounding TH’s novel HIV treatment – ibalizumab. We expect more ibalizumab data pertaining to safety and the primary endpoint at the ID Week in New Orleans on October 29, more clinical data pertaining to the secondary endpoints in November, a BLA filing for ibalizumab in Q4/2016 and U.S. commercialization in Q3/2017. Ibalizumab has FDA priority review designation which would shorten the BLA review time from 10 months to 6 months.”

In a research update to clients today, Uddin maintained his “Buy” rating on Theratechnologies, but raised his one-year price target on the stock from $4.40 to $5.30. His new price target implied a return of 81 per cent at the time of publication.

On October 4, Theratech reported its Q3, 2016 results. The company earned $888,000 on revenue of $8.92-million. CEO Luc Tanguay said the company is preparing for the anticipated launch of ibalizumab.

“In the third quarter, Theratechnologies continued to progress in accordance with its business plan and guidance for 2016. Sales are on track, we are managing expenses carefully and operations are consistently generating positive EBITDA (earnings before interest, taxes, depreciation and amortization). At the same time, the ibalizumab phase III trial is proceeding on schedule and we have started preparing for the anticipated launch in the United States in 2017,” said Luc Tanguay, president and chief executive officer, Theratechnologies.

Uddin expects Egrifta sales will rise to $36.5-million in fiscal 2016, to $46.52-million the following year, and to $51.1-million in fiscal 2018. He models no sales for ibalizumab in fiscal 2016, $9.01-million in sales for the new drug in 2017, and $30.66-million in fiscal 2018.