Theratechnologies Announces Financial Results for Fiscal Year 2012

Theratechnologies Announces Financial Results for Fiscal Year 2012 
MONTREAL, CANADA -- (Marketwire) -- 02/27/13 -- Theratechnologies
Inc. (Theratechnologies) (TSX:TH) today announced its financial
results for the period ended November 30, 2012. 
Fiscal 2012 Highlights 


 
--  Consolidated revenues of $13,567,000 
--  $4,255,000 in royalties compared to $1,443,000 in 2011 
--  Net loss decreased to $13,940,000 (including restructuring costs of
    $10,702,000) from $17,730,000 in 2011 (including restructuring costs of
    $716,000) 
--  $20,924,000 in liquidities at year-end (including bonds, tax credits and
    grants receivable)

 
"As we start a new fiscal year, we are more focused than ever. Our
revised business plan will build on growing EGRIFTA(TM) sales and
royalties in the U.S. while we also concentrate on generating
potential new revenues for EGRIFTA(TM) in the short-term by working
more closely with our partner in Latin America, working diligently at
trying to re-file in Europe or in individual European countries. All
of those initiatives are targeted towards becoming cash neutral and
providing us potential leverage for future initiatives," declared Mr.
Luc Tanguay, President and Chief Executive Officer. 
Fiscal Year 2012 Financial Results 
The financial results presented in this press release are taken from
the Company's Management's Discussion and Analysis, or MD&A, and
audited consolidated financial statements for the twelve-month period
ended November 30, 2012, which have been prepared in accordance with
International Financial Reporting Standards, or IFRS, as issued by
the International Accounting Standards Board, or IASB. The MD&A and
audited consolidated financial statements can be found at
www.theratech.com, www.sedar.com or www.sec.gov. Unless specified
otherwise, all amounts in this press release are in Canadian dollars.
As used herein, EGRIFTA(TM) refers to tesamorelin for the reduction
of excess abdominal fat in HIV-infected patients with lipodystrophy.
EGRIFTA(TM) is our trademark. 
For the 12-month period ended November 30, 2012: 
Consolidated revenue for the year ended November 30, 2012 amounted to
$13,567,000 compared to $14,928,000 in 2011. Our revenues are mainly
sales of EGRIFTA(TM) to EMD Serono for re-sale, royalties receiv
ed
from EMD Serono on U.S. sales to customers, and research services,
which include milestone payments and the amortization of the initial
payment received upon the closing of the agreement with EMD Serono.  
Under the terms of our agreement, we supply EGRIFTA(TM) to EMD Serono
for resale. Revenue generated from sale of goods amounted to
$5,235,000 in the twelve-month period ended November 30, 2012
compared to $8,351,000 in Fiscal 2011. EGRIFTA(TM) was first offered
for sale to the public in January 2011 and our sales in Fiscal 2011
reflect the buildup of stocks needed by EMD Serono for the product
launch in the U.S. market. Revenues from sale of goods in Fiscal 2012
were more closely tied to actual sales to patients. Future sales of
goods should also track patient sales but they can also vary
significantly in the short term as a function of EMD Serono's
procurement policies. 
Royalties on sales are paid quarterly in arrears based on the
calendar year. In fiscal 2012, we received royalty and license fees
revenue of $4,255,000 compared to $1,443,000 in 2011. Most of the
increase is due to growth in EGRIFTA(TM) sales, which were up
significantly in Fiscal 2012 compared to Fiscal 2011. In addition,
the royalties reported in Fiscal 2012 include an amount of $699,000
based on management's estimate of the royalties earned on EGRIFTA(TM)
sales in October 2012 and November 2012, for which the comparable
amou
nts from last year were only recorded in the first quarter of
Fiscal 2012.  
Revenue also includes the amortization of the initial payment of
$27,097,000 received upon the closing of the EMD Serono Agreement.
For the twelve-month period ended November 30, 2012, $4,077,000 was
recognized as revenue related to the initial payment, compared to
$5,134,000 in Fiscal 2011. The amortization amount in Fiscal 2012
reflects an extension made to the service period attributed to the
initial payment in order to allow sufficient time for work that has
yet to be completed. At November 30, 2012, the remaining deferred
revenue related to this transaction recorded on the consolidated
statement of financial position amounted to $4,481,000. 
For the twelve months ended November 30, 2012, the cost of sales of
EGRIFTA(TM) amounted to $5,056,000 compared to $9,146,000 in Fiscal
2011, largely as a result of the lower sale of goods in Fiscal 2012
as described above. The cost of sales exceeded sale of goods revenue
in 2011, reflecting the depletion of higher-cost inventory produced
at an earlier date and expenses associated with validating additional
suppliers for EGRIFTA(TM). Cost of sales is detailed in note 7 "Cost
of sales" of our audited consolidated financial statements for the
years ended November 30, 2012, 2011 and 2010. 
R&D expenses, net of tax credits, amounted to $6,341,000 in the
twelve months ended November 30, 2012 compared to $10,992,000 in
Fiscal 2011. The significant reduction in R&D expenses is largely due
to the adoption of a more focused business plan and the related
restructuring initiatives. R&D expenses in 2012 were associated with
pursuing the development of TH1173 and a new formulation of
EGRIFTA(TM), the two Phase 4 clinical trials, and helping our
commercial partners to pursue regulatory approvals in their
respective jurisdictions. 
Selling and market development expenses amounted to $852,000 for the
twelve months ended November 30, 2012, compared to $2,019,000 in
Fiscal 2011, reflecting cost savings from restructuring initiatives
in Fiscal 2012. With EGRIFTA(TM) licensing agreements now in place in
major markets, the ongoing selling and market development expenses
are reduced to the costs of managing relationships with our
commercial partners and certain selling expenses such as insurance
coverage for inventories. 
General and administrative expenses amounted to $5,462,000 in the
twelve months ended November 30, 2012 compared to $10,823,000 in
Fiscal 2011. The expenses in 2012 were considerably lower as a result
of restructurings, the departure of the former President and Chief
Executive Officer and the suspension of executive bonuses. In
addition, the relatively high expenses in 2011 included the costs
associated with the planned public offering of our common shares, the
cost of listing our common shares on NASDAQ, as well as costs related
to the change in leadership of the Company in that year. 
Restructuring costs amounted to $10,702,000 in the twelve months
ended November 30, 2012 compared to $716,000 in Fiscal 2011. Early in
Fiscal 2012, we took steps to narrow the focus of our business by
concentrating our efforts on EGRIFTA(TM) and on developing TH1173.
The related restructuring costs were $6,176,000, which were mainly
incurred in the first quarter. We announced further revisions to our
business plan and related restructuring activities aimed at
accelerating the process of becoming cash neutral in October 2012.
The second restructuring resulted in fourth-quarter costs of
$4,526,000. 
Taking into account the revenue and expense variations described
above, we recorded a net loss of $13,940,000 or $0.23 per share
(including restructuring costs of $10,702,000) in the twelve months
ended November 30, 2012 compared to a net loss of $17,730,000 or
$0.29 per share (including restructuring costs of $716,000) in Fiscal
2011. 
Our objective in managing capital is to ensure a sufficient liquidity
position to finance our business activities. For the twelve months
ended November 30, 2012, the use of cash in operating activities was
$15,634,000 (including $4,325,000, representing the cash portion of
restructuring costs) compared to $27,218,000 (including $664,000,
representing the cash portion of restructuring costs) in Fiscal 2011. 
As at November 30, 2012, cash and bonds amounted to $20,503,000, and
tax credits and grants receivable amounted to $421,000, for a total
liquidity position of $20,924,000. 
Fourth quarter 2012 Financial Results 
Consolidated revenue for the three months ended November 30, 2012
amounted to $3,899,000 compared to $4,410,000 for the same period in
2011. 
Revenue generated from the sale of goods for the three months ended
November 30, 2012 was $1,375,000 compared to $2,670,000 in the
comparable period in Fiscal 2011. The decline reflects the
procurement policies of EMD Serono. In fact, royalty revenues
demonstrate that sales by EMD Serono to end-users in the fourth
quarter of Fiscal 2012 were higher than those of the comparable
quarter in Fiscal 2011. 
Royalties were $1,656,000 in the three months ended November 30,
2012, compared to $671,000 in the comparable period of Fiscal 2011.
The increase is due, in part, to growth in year-over-year EGRIFTA(TM)
sales. In addition, the royalties reported in Fiscal 2012 include an
amount of $699,000 based on management's estimate of the royalties
earned on EGRIFTA(TM) sales in October 2012 and November 2012, for
which the comparable amounts from last year were only recorded in the
first quarter of Fiscal 2012.  
Revenue related to the amortization of the initial payment received
upon the closing of the EMD Serono Agreement was $868,000 for the
three-month period ended November 30, 2012, compared to $1,069,000 in
the comparable period of Fiscal 2011. The amortization amount in
Fiscal 2012 reflects an extension made to the service period
attributed to the initial payment in order to allow sufficient time
for work that has yet to be completed. 
Reflecting the decrease in sale of goods described above, the cost of
sales for the three months ended November 30, 2012 was $1,323,000
compared to $2,018,000. The decrease in sales also resulted in higher
absorption rates for fixed manufacturing costs resulting in a lower
gross margin in the fourth quarter of Fiscal 2012.  
R&D expenses, net of tax credits, amounted to $1,894,000 in the three
months ended November 30, 2012 compared to $2,020,000 in the
comparable period of Fiscal 2011. R&D expenses in 2012 were
associated with pursuing the development of TH1173 and a new
formulation of EGRIFTA(TM), the two Phase 4 clinical trials, and
helping our commercial partners to pursue regulatory approvals in
their respective jurisdictions. R&D activities in 2011 included the
discontinued Phase 2 clinical trial evaluating tesamorelin in muscle
wasting associated with COPD, work on a new formulation and a new
presentation of EGRIFTA(TM), the development of novel GRF peptides
including TH1173, as well as regulatory and clinical activities to
support our commercial partners and to meet post-approval commitments
made to the FDA. 
Selling and market development expenses amounted to $116,000 for the
three months ended November 30, 2012, compared to $530,000 for the
comparable period of Fiscal 2011, reflecting cost savings from
restructuring initiatives in Fiscal 2012. With EGRIFTA(TM) licensing
agreements now in place in major markets, the ongoing selling and
market development expenses are reduced to the costs of managing
relationships with our commercial partners and certain selling
expenses such as insurance coverage for inventories.  
General and administrative expenses amounted to $556,000 in the three
months ended November 30, 2012 compared to $1,789,000 in the
comparable period of Fiscal 2011. The expenses in 2012 were
considerably lower as a result of restructuring activities, the
departure of the former President and Chief Executive Officer, and
the suspension of executive bonuses.  
The restructuring costs in the three months ended November 30, 2012
of $4,526,000 res
ulted from the previously described revisions to our
business plan aimed at becoming cash neutral as soon as possible. 
Taking into account the revenue and expense variations described
above, we recorded a net loss of $4,341,000 or $0.07 per share
(including restructuring costs of $4,526,000) in the three months
ended November 30, 2012 compared to a net loss of $1,687,000 or $0.03
per share in the comparable period of Fiscal 2011. 
In the three months ended November 30, 2012, the use of cash in
operating activities amounted to $3,756,000 compared to $2,322,000 in
the comparable period of Fiscal 2011. 
Conference Call Details 
A conference call will be held today at 8:30 a.m. ET to discuss the
results. The call will be hosted by Luc Tanguay, President and Chief
Executive Officer. The conference call is 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 dialling 1-800-920-3365 (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 March 13, 2013, by
dialling 1-800-558-5253 (North America) or 1-416-626-4100
(International) and by entering the playback code 21649295.  
About Theratechnologies  
Theratechnologies (TSX:TH) is a biopharmaceutical company that
specializes in 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
SEC's website at www.sec.gov. 
Forward-Looking Information  
This press release contains forward-looking statements and
forward-looking information, or, collectively, forward-looking
statements, within the meaning of applicable securities laws, that
are based on our management's belief and assumptions and on
information currently available to our management. You can identify
forward-looking statements by terms such as "may", "will", "should",
"could", "would", "outlook", "believe", "plan", "envisage",
"anticipate", "expect" and "estimate", or the negatives of these
terms, or variations of them. The forward-looking statements
contained in this press release include, but are not limited to,
statements regarding the regulatory approval of EGRIFTA(TM) in
various territories outside of the United States, the capacity of our
commercial partner in the United States to continue the
commercialization of EGRIFTA(TM) in that country, the capacity of our
commercial partners outside of the United States to commercialize
EGRIFTA(TM) in their respective territories, our capacity to become
cash neutral and to tightly control our expenses and our capacity to
re-file a marketing authorization application in Europe or in certain
European countries for EGRIFTA(TM) . 
Forward-looking statements are based upon a number of assumptions and
include, but are not limited to, the following: EGRIFTA(TM) will
receive approvals in various territories outside the United States,
no additional clinical studies will be required by regulatory
authorities outside of the Unites States to obtain these regulatory
approvals, EGRIFTA(TM) will be accepted by 
the marketplace in
territories outside of the United States and will be on the list of
reimbursed drugs by third-party payors in these territories, the
relationships with our commercial partners and third-party suppliers
will be conflict-free, such third-party suppliers will have enough
capacity to manufacture and supply EGRIFTA(TM) to meet demand and on
a timely basis, the prescription base in the United States for
EGRIFTA(TM) will continue to grow and no unexpected events resulting
in unplanned material expenses will occur.  
Forward-looking statements are subject to a variety of risks and
uncertainties, many of which are beyond our control that could cause
our actual results to differ materially from those that are disclosed
in or implied by the forward-looking statements contained in this
press release. These risks and uncertainties include, but are not
limited to, the following: the risk that EGRIFTA(TM) is not approved
in all or some of the territories where our commercial partners have
filed and intend to file marketing authorization applications, the
risk that the royalties generated from sales of EGRIFTA(TM) in the
United States do not increase or that they decrease, the risk that
conflicts occur with our commercial partners jeopardizing the
commercialization of EGRIFTA(TM), the risk that the supply of
EGRIFTA(TM) to our commercial partners is delayed or suspended as a
result of problems with our third-party suppliers, the risk that
EGRIFTA(TM) is withdrawn from the market as a result of defects or
recalls, the risk that our intellectual property is not adequately
protected, the risk that even if approved in territories outside of
the United States, EGRIFTA(TM) is not accepted in these marketplaces
or is not on the list of reimbursed drugs by third-party payors and
the risk that unexpected events occur resulting in unplanned material
expenses.  
We refer potential investors to the "Risks Factors" section of our
Annual Report on Form 20-F dated February 26, 2013 available at
www.sedar.com, www.sec.gov and www.theratech.com. 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 statements reflect current expectations
regarding future events and speak only as of the date of this press
release and represent our expectations as of that date.  
We undertake 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.
Contacts:
Denis Boucher
NATIONAL Public Relations
514-843-2393
 
 
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