Theratechnologies Inc. (TH.TO) Suspends Most Long-Term R&D Activities, Cuts Jobs
10/30/2012 6:45:19 AM
Theratechnologies Inc. (TH.TO) (THER) today announced its revised business plan which will focus on revenue growth from tesamorelin in the short term and expenditure control.
"Our plan is to become cash neutral rapidly by focusing almost all of our efforts and resources on maximizing revenues from tesamorelin in the near term, while continuing to keep a cap on expenses. By strengthening our base now, we can better assure our success in the future and assess opportunities," said Luc Tanguay, President and Chief Executive Officer.
Stimulating more potential revenues from tesamorelin
"Today, we have a great product approved in one major territory and it is obvious to us that we must spend all of our energy and focus on getting the most out of it in all territories," stated Mr. Tanguay.
In support of EMD Serono''s efforts, Theratechnologies is working on incremental improvements to EGRIFTA™''s presentation and formulation. This includes a new single-vial presentation for which shipping began in September, the gathering of data in support of developing a room temperature presentation, and the development of a more concentrated formulation to be delivered in a smaller syringe. These improvements should provide EMD Serono with additional tools to manage the lifecycle of EGRIFTA™ in the U.S.
In an effort to capture new revenue streams from tesamorelin, Theratechnologies will focus in the next quarters on Brazil and Europe, the two most important potential markets after the U.S.
In Brazil, Theratechnologies will work closely with sanofi, its commercial partner in this territory, to support them in all of their regulatory activities. As previously announced, technical deficiencies related to the manufacturing assessment of the Brazil dossier have been addressed. Also, the assessment of the clinical portion of the dossier continues to take its course.
In Europe, Theratechnologies continues to work on identifying options to resubmit tesamorelin. Discussions with Ferrer Internacional S.A. (Ferrer), its commercial partner in this territory, are ongoing to ascertain the most appropriate path to take. By year-end, Theratechnologies will have completed its assessment of the resubmission strategy and whether the process will be undertaken by Ferrer or un-partnered.
Second generation GRF peptide TH1173
Theratechnologies will complete the ongoing pre-clinical studies for its second generation growth hormone-releasing peptide, TH1173, by year-end, as previously planned.
The TH1173 clinical program will be financed internally when the Company generates sufficient additional revenues from tesamorelin. As it moves forward, the Company may also look to identify and develop partnership and licensing opportunities in selected territories to autonomously finance TH1173.
This approach will ensure that the Company can maintain adequate liquidities to finance its near-term activities aimed at increasing revenue potential from tesamorelin while ensuring that the clinical development of TH1173 will be adequately financed.
Impact of action plan and measures taken
The re-alignment of Theratechnologies'' priorities in the short term has led to the suspension of most of its internal long-term R&D activities, which will impact approximately 15 employees. This will result in restructuring costs of $5.4 million. This includes $2.5 million in employee compensation (inclusive of the former CEO) and $2.9 million in non-cash items such as lease and lab equipment write-offs. Most of these restructuring costs will be registered in the fourth quarter of 2012.
In addition, management has agreed to forgo all performance bonuses for 2012 and, for a second year in a row, has also agreed to a salary freeze for the next fiscal year.
"We believe that the action plan we have adopted and the measures we are putting in place today are in the best interests of our company and our shareholders," stated Mr. Tanguay.
Conference Call Details
A conference call will be held today at 8:45 a.m. ET and hosted by Luc Tanguay. The conference call will be open to questions from financial analysts. Media and other interested individuals are invited to participate in the call on a "listen-only" basis.
The conference call can be accessed by dialing 1-800-743-9807 (North America) or 1-416-981-9000 (International). The conference call will also be accessible via webcast at www.theratech.com. Audio replay of the conference call will be available until November 13 2012, by dialing 1-800-558-5253 (North America) or 1-416-626-4100 (International) and by entering the playback code 21609750.
Theratechnologies (TH.TO) (THER) is a specialty pharmaceutical company that discovers and develops innovative therapeutic peptide products, with an emphasis on growth-hormone releasing factor peptides. Further information about Theratechnologies is available on the Company''s website at www.theratech.com, on SEDAR at www.sedar.com and on the Securities and Exchange Commission''s website at www.sec.gov.
This press release contains certain statements that are considered "forward-looking information" within the meaning of applicable securities legislation, which statements may contain such words as "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions. This forward-looking information includes, but is not limited to, information regarding the capacity of the Company to become cash-neutral, to increase its revenue in the short term, to autonomously finance the clinical development of TH1173, to obtain the approval of tesamorelin for the treatment of excess abdominal fat in HIV-infected patients with lipodystrophy in territories where applications have been filed, to develop a new presentation and new formulation of EGRIFTA™ and to resubmit a marketing authorization application for tesamorelin in Europe.
Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Theratechnologies'' control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These assumptions include, but are not limited to, the fact that we will be able to control our costs and no unexpected expenses will have to be incurred, our revenues from the sale of EGRIFTA™ in the United States will increase, we will be able to develop a new presentation and a new formulation of EGRIFTA™ and such improvement will help managing its lifecycle, we will generate enough revenue to finance the clinical development of TH1173 or find a partner to do so in selected countries, regulatory authorities in territories where marketing authorization applications have been filed will approve tesamorelin for the treatment of excess abdominal fat in HIV-infected patients with lipodystrophy and, if approved, tesamorelin will be accepted by the marketplace in these territories resulting in an increase in revenues for the Company, we will be able to determine an economically viable strategy to resubmit a marketing authorization application in Europe for tesamorelin and European regulatory authorities will approve tesamorelin for commercialization and we will not be delayed in conducting the ongoing pre-clinical studies for TH1173. These risks and uncertainties include, but are not limited to, the risk that we cannot control our costs due to unforeseen circumstances, that the revenues generated from the sale of EGRIFTA™ in the United States decrease or remain stable, that EGRIFTA™ is subject to a recall or is withdrawn from the market, that regulatory authorities do not approve tesamorelin for the treatment of excess abdominal fat in HIV-infected patients with lipodystrophy for commercial sale in territories where marketing authorization applications are pending, that we are unable to develop an economically viable strategy to resubmit a marketing authorization application in Europe for the commercial sale of tesamorelin and that, even if submitted in Europe, the European authorities do not approve tesamorelin for commercial sale, that we do not have enough revenue to pursue the development of TH1173 or are unable to find a partner for its development, that the data gathered do not support the development of a new presentation or the development of a new formulation and that we are delayed in the conduct of our ongoing pre-clinical studies for TH1173.
Theratechnologies refers potential investors to the "Risk Factors" section of its Annual Information Form (AIF) dated February 27, 2012. The AIF is available at www.sedar.com and at www.sec.gov under Theratechnologies'' public filings. The reader is cautioned to consider these and other risks and uncertainties carefully and not to put undue reliance on forward-looking statements. Forward-looking information reflects current expectations regarding future events and speaks only as of the date of this press release and represents Theratechnologies'' expectations as of that date.
Theratechnologies undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise, except as may be required by applicable law.
NATIONAL Public Relations