Theratechnologies(THTX) - 2023 Q4 - Annual Report

Financial Performance - Adjusted EBITDA for Q4 2023 was $4.965 million, a significant improvement from $(2.439) million in Q4 2022[1] - Net loss for Q4 2023 was $2.755 million ($0.08 per share), compared to a net loss of $7.929 million ($0.09 per share) in Q4 2022[2] - Consolidated revenue for Fiscal 2023 was $81.764 million, a 2.1% increase from $80.057 million in Fiscal 2022[3] - Q4 2023 revenue reached a record $23.452 million, a 9.5% increase from $21.421 million in Q4 2022[12] - Adjusted EBITDA for Fiscal 2023 was $(2,907,000), an improvement from $(22,088,000) in Fiscal 2022, despite negative impacts from sudocetaxel zendusortide material expenses ($3,749,000) and BWFI production expenses ($536,000) in the first half of the year[45] - Net loss for Fiscal 2023 was $23,957,000 ($0.91 per share), a significant improvement from $47,237,000 ($1.98 per share) in Fiscal 2022[46] Product Sales - EGRIFTA SV® net sales grew 6.4% to $53.705 million in Fiscal 2023, driven by higher unit sales and net selling price[4] - Trogarzo® net sales decreased 5.2% to $28.059 million in Fiscal 2023, impacted by inventory drawdowns and higher rebates[5] - EGRIFTA SV® Q4 2023 sales increased 17.3% to $16.958 million, driven by higher unit sales[13] - Trogarzo® Q4 2023 sales decreased 6.7% to $6.494 million, mainly due to lower unit sales[14] Revenue and EBITDA Guidance - 2024 revenue guidance is set at $87-90 million, with Adjusted EBITDA expected to be $13-15 million[11] Research and Development (R&D) Expenses - R&D expenses decreased to $5.229 million in Q4 2023 from $9.455 million in Q4 2022, due to lower spending on clinical trials and completed projects[16] - R&D expenses decreased by 17.8% to $30,370,000 in Fiscal 2023, primarily due to reduced spending on oncology programs and reorganization-related severance costs of $1,384,000[40] Selling and Administrative Expenses - Selling expenses dropped to $26,769,000 in Fiscal 2023 from $39,391,000 in Fiscal 2022, largely due to the exit from the European Trogarzo® market and reduced amortization expenses for commercialization rights[41] - General and administrative expenses decreased to $15,617,000 in Fiscal 2023, partly due to the termination of Trogarzo® commercialization in Europe and reorganization-related severance costs of $359,000[43] Cash and Liquidity - Cash, bonds, and money market funds totaled $40,387,000 as of November 30, 2023, up from $33,070,000 in 2022, with $20,000,000 required to meet liquidity covenants[39] - The company's current cash, bonds, and money market funds amounted to $40,387,000, exceeding the minimum liquidity requirements of $15,000,000 to $20,000,000 under the Marathon Credit Agreement[55] Loan Facility and Credit Agreement - The company failed to meet conditions to draw down the third ($15,000,000) and fourth ($25,000,000) tranches of the Loan Facility, which will expire after March 31, 2024[30] - Net finance costs increased to $12,909,000 in Fiscal 2023, driven by higher interest expenses on the Loan Facility ($3,906,000) and amendments to the Marathon Credit Agreement ($3,540,000)[44] - Amendments to the Marathon Credit Agreement revised minimum liquidity requirements to $15,000,000-$20,000,000 and shifted revenue requirements to Marathon Adjusted EBITDA targets[50] - The Marathon Credit Agreement revised minimum liquidity requirements to $15,000,000 to $20,000,000 based on Marathon Adjusted EBITDA thresholds starting October 31, 2023[55] - The company currently meets the Marathon Adjusted EBITDA targets and projects continued compliance through expense management[55] Restructuring and Reorganization - Restructuring costs in 2023 included severance and other expenses related to the reorganization announced in July and completed in October 2023[57] Risks and Uncertainties - The company faces going concern uncertainty due to negative cash flows from operating activities ($5,678,000) and reliance on adherence to the Marathon Credit Agreement conditions[47][52] - Risks include potential defaults under the Marathon Credit Agreement, which could trigger a 300 basis points increase on the outstanding loaned amount[59] - The company faces risks of decreased or stagnant product sales in 2024, product recalls, or regulatory changes impacting sales[59] - Potential non-approval of the F8 formulation by the FDA upon resubmission poses a risk to the company[59] - The company may face challenges in identifying additional commercial assets or entering into satisfactory commercial agreements[59] - Forward-Looking Statements reflect expectations as of the press release date and are subject to risks and uncertainties beyond the company's control[60] Capital Raising - The company realized net proceeds of $23,575,000 from the issuance of Common Shares and Exchangeable Subscription Receipts during Q4 Fiscal 2023[54]