Theratechnologies new CEO gets thumbs up at Mackie Research

After a passing of the torch to a new CEO for Theratechnologies (Theratechnologies Stock Quote, Chart, News TSX:TH), analyst André Uddin of Mackie Research is sticking with his assessment of the company, saying in an update to clients on Monday that at these prices the stock is a bargain.

Montreal-based Theratechnologies on Monday announced the retirement of president and CEO Luc Tanguay to be replaced by Paul Lévesque, with Tanguay remaining available to smooth out the transition.

Lévesque has 30 years of experience in the pharmaceutical industry, beginning his career in 1985 at UpJohn and eventually becoming president of Pfizer Canada, a role which he served from 2007 to 2012, after which he has held several marketing and executive positions at Pfizer’s New York headquarters.

“Theratechnologies is at a turning point in its history,” said Lévesque in a press release.

“I am extremely proud to join this team and leverage my knowledge and expertise to ensure the company's continued growth, as well as to harness its full potential. One of my main goals is to bring Trogarzo to people living with HIV. Trogarzo, whose approval has already been fast tracked, is a breakthrough drug designed to meet an unmet medical need.”

Theratechnologies currently has two launched products in the HIV field in the United States: Trogarzo for multi-drug resistant HIV and Egrifta, the only approved drug for HIV-related lipodystrophy. The company has two pre-clinical oncology candidates as well.

Uddin said Lévesque should be good for TH.

“Under the leadership of Mr. Tanguay Theratechnologies was transformed into a commercial stage company with two FDA approved drugs that is generating decent growth. We believe Mr. Lévesque should continue to build upon the commercial platform,” Uddin wrote.

“We believe Mr. Lévesque’s experience in global drug commercialization should be beneficial to the marketing of Trogarzo in the U.S. and Europe,” he said.

Along with TH’s launch of Trogarzo in Europe (currently in its initial stage) and Egrifta’s stable cash flow stream to the company, Uddin sees an upcoming Phase 3 trial for Egrifta for HIV NASH patients as a very promising opportunity.

“TH’s shares are undervalued. We believe TH should be bought for its growth, cheap valuation and particularly for its Phase 3 NASH-HIV program,” Uddin wrote.

Last week, TH delivered its fourth quarter financials which featured a top line of $16.4 million and a net loss of $6.4 million or $0.08 per share. Adjusted EBITDA was negative $3.2 million. On the numbers, Uddin had been forecasting an EBITDA loss of $1.3 million. For the Q4, Trogarzo delivered $7.7 million in sales, up 14 per cent sequentially, whereas Egrifta sales dropped from $9.7 million a year ago to $8.7 million.

TH ended 2019 down 55 per cent, while in 2020 the stock is currently down 24 per cent. For the fiscal 2020 year, Uddin forecasted revenue of $83.9 million and adjusted EBITDA of $7.6 million. With the update the analyst is maintaining his “Buy” rating and $5.80 target price, which at press time represented a projected one-year return of 86 per cent.