Theratechnologies is derisked by new ibalizumab data, Echelon says

New results from Theratechnologies (Theratechnologies Stock Quote, Chart, News: TSX:TH) are further reducing the company’s regulatory risk, says Echelon Wealth Partners analyst Doug Loe.

This morning, Theratechnologies released its 48-week efficacy and safety results for ibalizumab in patients infected with multidrug-resistant HIV-1 who completed the 24-week phase 3 study (TMB-301) and continued treatment in the expanded access program study (TMB-311). The company said that of the 27 patients who completed the 24-week treatment period of TMB-301 in the United States, all entered TMB-311, where patients continued to receive ibalizumab at 800 milligrams every two weeks for up to 48 weeks. Theratech said the virologic suppression observed at week 24 was sustained through week 48; median viral load reduction from baseline was 2.5 log 10 at weeks 24 and 48. In TMB-311, all 15 patients with an undetectable viral load at week 24 maintained suppression to week 48.

“As we await an FDA [Food and Drug Administration] decision for ibalizumab, this long-term data reinforces the critical role ibalizumab could have for patients struggling with multidrug-resistant HIV,” said CEO Luc Tanguay. “With the dramatic progress made over the past two decades in treating HIV, the crucial need for new treatments for these very vulnerable patients is often overlooked. At Theratechnologies, focusing on these unmet needs is what we are committed to doing, and ibalizumab is a prime example of that. We thank both the patients and investigators for participating in this important study.”

Loe says he would characterize 48-week data as positive, but says he was already confident in ibalizumab’s FDA approvability.

“Strong ibalizumab responsiveness out to 48-weeks should support FDA regard when rendered by PDUFA date in Jan/18, if not sooner: So the top-line data as extracted from today’s press release and as reported at the IDWeek conference in San Diego (the abstract will actually be presented on Oct 6th but is available for review on-line) were, in our view, impressive and approvable, with median HIV-1 viral load reduction of 2.5log (so, about 99.5% or so as a median value) clearly strong in comparison to viral load reductions that MDR patients were able to achieve with previous therapies to which by definition they were no longer responsive,” the analyst says.

In a research update to clients today, Loe maintained his “Buy” rating and one-year price target of $12.00 on Theratechnologies, implying a return of 55.6 per cent at the time of publication.

Loe thinks Theratech will generate EBITDA of negative $2.0-million on revenue of $44.4-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $29.6-million on a topline of $114.1-million the following year.