Theratechnologies is still undervalued, says Mackie Research

A better than expected quarter has Mackie Research Capital analyst André Uddin feeling good about Theratechnologies’ (Theratechnologies Stock Quote, Chart, News: TSX:TH) prospects.

This morning, Theratechnologies reported its Q4 and fiscal 2016 results. In the fourth quarter, the company posted EBITDA of $2.81-million on revenue of $10.37-million, a topline that was up 15.2 per cent over the same period a year prior.

“Our last fiscal year proved to be both rewarding and exciting. We ended the year with our best results ever generated from the sales of our product,” said CEO Luc Tanguay. “In fact, Egrifta has become a foundation, which we have been able to build on. It made it possible to acquire the commercial rights of ibalizumab which holds tremendous potential and could, if approved by the Food and Drug Administration, bring significant additional revenues to our company. The ibalizumab transaction could mark a turning point for the future of our company,” concluded Mr. Tanguay.

Uddin says this was a very good quarter for Theratech, save for one data point he regards as a slight hiccup.

“This morning, TH announced its Q4 results which were better than we expected but 2017 Egrifta guidance was lower than we forecast (we have not revised our sales estimates),” said the analyst. “TH is one of our top picks for 2017 due to the expected launch of its first-in-class, anti-HIV monoclonal antibody, Ibalizumab.” Uddin later added: “TH is guiding to revenues of $40-42M. However, we are not changing our Egrifta sales estimate of $46.5M at this time. We believe cross selling (due to ibalizumab promotion) could result in better than expected Egrifta numbers.”

In a research update to clients today, Uddin maintained his “Buy” rating and one-year price target of $7.60 on Theratechnologies, implying a return of 124 per cent at the time of publication.

Uddin thinks Theratechnologies will generate revenue of $56.5-million in fiscal 2017. He expects the company’s topline will climb to $99.8-million the following year.