Theratechnologies is one of Canada’s best growth stories, Mackie Research says

Despite first quarter results that fell below expectations, Mackie Research Capital analyst André Uddin is staying bullish about Theratechnologies (Theratechnolgies Stock Quote, Chart, News: TSX:TH).

This morning, Theratech announced its Q1, 2018 results. The company lost $2.62-million on revenue of $10.2-million, a topline that was up 13 per cent over the same period last year.

“We have every reason to be excited and proud of where we are today with the recent approval of Trogarzo,” CEO Luc Tanguay said. “We are seeing strong interest from both physicians and patients. As Trogarzo will soon be commercially available, our fully trained sales force started calling on more than 5,000 physicians who treat the vast majority of people living with multidrug resistant HIV. Moreover, we had our strongest first quarter ever in terms of net sales of EGRIFTA.

Uddin notes that Theratech’s Q1 fell below his and slightly missed the consensus expectations. But he says things are looking up for the company, with the launch of Trogarzo, continuing Egrifta sales, and the potential for newly acquired HIV products. The analyst says he regards the company as one of Canada’s best growth stories.

“TH expects to launch Trogarzo in the U.S. by the end of April 2018. TH is working with payors to obtain Trogarzo reimbursement – which is expected to take 3 to 6 months,” Uddin says. “TH has received positive feedback from payors. The company has also received prescriptions from clinics even before Trogarzo is officially launched – a positive signal for future sales. Trogarzo is priced at a wholesale acquisition cost (WAC) of US$118,000/year – the net selling price should be around a 30% discount to the WAC. There are estimated 8K to 10K MDR HIV patients living in the U.S. Trogarzo could also be used off-label in 20K HIV patients who are intolerant to current antiretroviral treatments and 8K HIV patients that are non-adherent to conventional HIV treatments. Trogarzo is the only HIV drug that does not require daily dosing – Trogarzo is administered once every two weeks via an IV infusion. We estimate U.S. peak sales of over US$350M.”

In a research update to clients today, Uddin maintained his “Buy” rating and one-year price target of $11.50 on Theratechnologies, implying a return of 21 per cent at the time of publication.

Uddin thinks TH will generate Adjusted EBITDA of $26.8-million on revenue of $117.6-million in fiscal 2018.