CIBC ups Theratechnologies PT to $15 from $10.30

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CIBC World Markets raised its price target for Theratechnologies (TSX:TH) to $15 from $10.30 after the FDA approved Trogarzo for the treatment of multi-drug resistant HIV patients. The stock was quoted at $9.35 in afternoon trading on March 7.

Analyst Prakash Gowd writes that FDA approval of Trogarzo is a very positive development for Theratechnologies, and the market should react positively to the news, as development risk is now off the table.

While commercial risk remains, “we are confident that Theratechnologies has all the sales and marketing infrastructure and commercial strategy in place to make Trogarzo a success,” he added.

The company plans to launch Trogarzo within six weeks and reimbursement will likely take six months to ramp up, Mr. Gowd said. Until then, the company will implement co-pay programs and patient assistance plans to ensure access, and help physicians and patients manage prior authorizations for coverage, he added.

Mr. Gowd expects the 2018 launch year to be neutral on EBITDA, but to accelerate in 2019. He is forecasting peak sales of $500-million in the U.S. in 2021, based on 5,500 patients with multi-drug resistant HIV-1 infection failing treatment.