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Theratechnologies is a Buy, says Research Capital


Solid data on a drug candidate from Theratechnologies Inc (Theratechnologies Inc Stock Quote, Chart, News, Analysts, Financials NASDAQ:THTX) has analyst André Uddin of Research Capital staying quite bullish on the stock and company. Uddin delivered an update to clients on Monday where he reiterated his “Buy” rating and $6.20 target price, which at the time of publication represented a projected one-year return of 158 per cent.

Specialty pharma and biotech company Theratechnologies focuses on the HIV field and has two products available in the United States in Trogarzo for multi-drug resistant HIV and Egrifta, the only approved drug for HIV-related lipodystrophy. At the moment, Theratechnologies is looking to put Egrifta through a Phase 3 trial for the liver disease non-alcoholic steatohepatitis (NASH) with a partner, while it also has two oncology candidates, one of which has entered into a Phase 1 trial.

Montreal-based Theratechnologies announced on Friday their participation in three poster presentations at the 2022 Annual Meeting of the American Association for Cancer Research (AACR) to be held April 8-13, 2022, in New Orleans. The posters are on TH1902, the company’s proprietary anti-SORT1 receptor peptide-drug conjugate linked to chemotherapy drug docetaxel.

Theratechonogies said data from pre-clinical work demonstrate “remarkable promise” for TH1902.

“The presence of cancer stem cells (CSCs) is associated with aggressive disease, unregulated tumour growth, increased migration of cancer cells, invasion, self renewal and resistance to standard chemotherapy and radiation. Failure to eliminate these cells with current treatments leads to resistance and progression and there are few therapies that have been shown to target CSCs. In preclinical models treated with TH1902, there was marked tumour growth inhibition of cancer stem-like cells with no impact on healthy tissue,” said Christian Marsolais, Senior Vice President and Chief Medical Officer for Theratechnologies, in a press release. “This further validates our hypothesis that TH1902 may be effective in hard-to-treat, resistant cancers.”

Explaining the new results, Uddin said the three posters at the AACR show that TH1902 inhibited in vivo CD133+ cancer stem-like cells in both triple negative breast cancer (TNBC) and ovarian cancer (OC); second, that TH1902 demonstrated in vivo anti-cancer efficacy alone or in combination with carboplatin against OC and endometrial cancers; and third, that TH1902 inhibited growth of melanoma tumour cells and the formation of lung metastases in a syngeneic mouse model.

Uddin said, “TH has done a tremendous amount of pre-clinical work on TH1902 for SORT1 receptor-positive tumours, especially for TNBC and OC.”

Uddin explained that the SORT1+ platform targets sortilin 1 receptor positive cancers by linking anti-cancer drugs to a peptide that specifically binds to the SORT1 receptor, which should improve existing chemotherapy drugs by helping those drugs bypass multi-drug resistance, by enabling a higher cytotoxic payload and by engendering improved safety due to its targeted SORT1 receptor positive mechanism (from a lower concentration in non-cancerous cells).

The SORT1+ technology came in TH’s hands through the acquisition of Katana Biopharma in 2019 when Theratechnologies paid about $2 million plus potential milestone payments. (All figures in US dollars.)

“TH1902 is TH’s lead PDC candidate stemming from the SORT1+ technology – it is a proprietary anti-SORT1 receptor peptide linked to docetaxel, a well-established chemotherapy. The FDA has granted Fast Track designation to TH1902 to be developed as a single agent for the treatment of all advanced solid tumour expressing SORT1 receptors which are refractory to standard therapy,” Uddin wrote.

The TH1902 Phase 1 clinical trial currently being conducted by Theratechnologies has two parts, namely, a safety, pharmacokinetics, maximum tolerated dose study and preliminary anti-tumour activity study involving 15 to 25 patients and a basket trial for safety and efficacy with about 70 patients. 

“Although not yet determined by TH, management has indicated OC and EC could potentially be TH1902’s lead indications. For OC, the American Cancer Society estimates that approx. 19,880 women would be diagnosed in 2022. Around 70 per cent of OC patients have a recurrence,” Uddin said. 

“We view TH1902 as a potential alternative to common chemo used as a 2nd or later line. EC is the most common gynecologic malignancy but less lethal than OC. The American Cancer Society estimates that there would be approx. 65,950 new cases of EC in 2022,” he wrote.

Looking ahead on Theratechnologies, Uddin is focusing on Phase 1 safety data on TH1902 due in the first half of this year, a NASH licensing (potentially sometime in 2022) and the company’s first quarter 2022 results which are due on April 13. 

For the Q1 2022, Uddin is forecasting revenue and adjusted EBITDA of $16.8 million and negative $5.8 million, respectively. For the full 2022 year, he has estimated $81.7 million in revenue and negative $23.5 million in EBITDA. For 2023, Uddin has posited $104.6 million in revenue and negative $25.7 million in EBITDA.

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