Theratechnologies revises business plan, cuts 15 employees
Theratechnologies, a Canadian specialty pharmaceutical company focused on therapeutic peptide products, has revised its 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," said Luc Tanguay, president and CEO, Theratechnologies. “By strengthening our base now, we can better assure our success in the future and assess opportunities.”
Tanguay continued, “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.”
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, its commercial partner in Europe, 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.
In support of EMD Serono's efforts, Theratechnologies is working on incremental improvements to Egrifta's (tesamorelin) presentation and formulation. This includes a new single-vial presentation for which shipping began in September 2012, 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 addition, Theratechnologies plans to complete its ongoing pre-clinical studies for its second generation growth hormone-releasing peptide, TH1173, by year-end. The TH1173 clinical program will be financed internally when the company generates sufficient additional revenues from tesamorelin. As it moves forward, Theratechnologies 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.
This 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: $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," said Tanguay.