Theratechnologies can do better than the Future Pak offer, Leede says

An offer to buy Theratechnologies (Theratechnologies Stock Quote, Chart, News, Analysts, Financials TSX:TH) doesn’t have Leede Financial analyst Douglas Loe suggesting that shareholders should Tender their shares to the deal.

On April 11, TH reported that it had received multiple offers from Future Pak to buy the company out, noting that after receiving any offer it reserved a “go-shop” provision.

Loe, who April 14 maintained his “Speculative Buy” rating and price target of $7.25 on TH, says that provision will likely result in a better offer than what is on the table.

“Independent of Future Pak’s offer – and there is still a wide delta between even the cash value of the offer and TH’s current share price – we believe that TH is currently trading at a sufficiently large discount from our PT to justify our Speculative Buy rating, and the competing offer that Thera cited in its Friday afternoon press release suggests to us that a competitive auction could be on the horizon,” Loe wrote. “At current levels, our PT corresponds to a one-year return of 168%, independent of any momentum that TH shares generate on the path to Future Pak’s bid value, should it be consummated in coming trading sessions.”

Loe thinks TH will post EBITDA of $12.0-million on revenue of $51.0-million in fiscal 2025. He expects those numbers will improve to EBITDA of $27.2-million on revenue of $58.0-million in fiscal 2026.

“A competing acquirer is apparently in play, and a competitive auction for Thera’s Rx portfolio could drive share price appreciation even further,” the analyst added. “In a press release issued late on Friday afternoon, Thera indicated that it has a competing offer from another firm (just described as a ‘potential acquirer’ so we do not know if it is a specialty pharmaceutical peer or a pharma services outsourcer like Future Pak) and a negotiation on value is ongoing with that alternative bidder. Virtually all of Thera’s revenue/EBITDA, at least until olezarsen/donidalorsen are approved/launched in Canada, are from US Egrifta/Trogarzo sales, so the alternative bidder would likely have US marketing infrastructure already, and presumably an infectious disease Rx franchise already in place.”