• Adjusted EBITDA: $7.2 million for the third quarter.

• Net Profit: $3 million or $0.06 per share for the quarter.

• Revenue Growth: 8% increase from the same period last year.

• Net Sales: $22.6 million, an 8.4% growth versus the same quarter last year.

• EGRIFTA SV Sales: $16.7 million, a 27% increase year-over-year.

• Trogarzo Sales: $5.9 million, down from $7.7 million in the same quarter last year.

• Gross Margin for EGRIFTA: 91%.

• Gross Margin for Trogarzo: 48%.

• R&D Expenses: $2.6 million, a 52% decrease from last year.

• Selling Expenses: $6.3 million for the quarter.

• G&A Expenses: $3 million, a 19% decrease from the third quarter of 2023.

• Cash Position: $39 million at the end of the quarter.

• Net Debt Position: $20 million.

• Revenue Guidance: Revised to $83 million to $85 million for fiscal 2024.

• Adjusted EBITDA Guidance: Increased to $17 million to $19 million for fiscal 2024.

• Warning! GuruFocus has detected 6 Warning Signs with THTX.

Release Date: October 10, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Theratechnologies Inc (NASDAQ:THTX) achieved profitability with an adjusted EBITDA of $7.2 million and a net profit of $3 million for the third quarter.

• Revenues for the quarter increased by 8% compared to the same period last year, driven by strong performance of EGRIFTA SV.

• EGRIFTA SV showed double-digit growth in enrollments, unique patients, and units sold year-to-date.

• The company has a strong cash position of close to $39 million, supporting its strategic initiatives.

• Theratechnologies Inc (NASDAQ:THTX) increased its adjusted EBITDA guidance to $17 million to $19 million, reflecting strong operational performance.

Negative Points

• The manufacturing of EGRIFTA SV faced a voluntary shutdown, impacting production and creating pressure on current inventory.

• The company revised its top line revenue guidance to $83 million to $85 million due to supply constraints, despite strong demand for EGRIFTA SV.

• Trogarzo sales decreased due to competitive pressures, although they have stabilized recently.

• There is a potential risk of drug shortage for EGRIFTA SV if the manufacturing issues are not resolved promptly.

• The company faces uncertainty regarding the timing of FDA approval for the PAS submission related to EGRIFTA SV manufacturing.

Q & A Highlights

Q: Can you provide details on the remediation efforts by the manufacturer and potential contingency plans if EGRIFTA SV manufacturing does not resume in mid-October? A: Paul Levesque, CEO, explained that they are in daily discussions with the manufacturer to confirm the sequence of events for the PAS filing. They are confident that the FDA will approve the release of the batch produced in late October, as there is enough supply to meet patient demand until mid-January. John Leasure, Global Commercial Officer, added that they are managing inventory closely to ensure equal distribution among pharmacy partners.

Q: What are the expectations for business development activities and potentially accretive assets? A: Paul Levesque, CEO, stated that the company is in a stronger financial position, which has attracted interest from biotechs needing partners. They are focused on in-licensing or acquiring innovative therapies that challenge the standard of care, particularly in the US and Canada.

Q: Are you only looking at commercially available assets, and will these drugs be in-licensed or acquired? A: Paul Levesque, CEO, mentioned they are considering both in-licensing and acquisition opportunities, focusing on products that offer a compelling value proposition and challenge the standard of care. They are open to setting up a field force in the US or Canada if necessary.

Q: Do you plan on setting up a backup facility for EGRIFTA? A: Philippe Dubuc, CFO, stated that they do not plan to set up a backup facility. Instead, they will build up a solid inventory to cover one or two years of material, as it is more cost-effective than setting up additional manufacturing facilities.

Q: How do you plan to ensure the sustainability of your EBITDA and bottom-line performance? A: Philippe Dubuc, CFO, explained that the current operating structure is ideal for both Trogarzo and EGRIFTA, allowing any top-line growth to flow directly to the bottom line without needing additional spending. John Leasure, Global Commercial Officer, added that while sales might be lighter early in Q1 2025, they expect a reversal later in the quarter.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.