Executive Summary / Key Takeaways

• Theratechnologies Inc. (NASDAQ: THTX) successfully executed a strategic pivot towards commercialization and profitability, culminating in its acquisition by CB Biotechnology, an affiliate of Future Pak, for up to $254 million, including contingent value rights.
• The company's core HIV franchise, led by EGRIFTA SV and the newly approved EGRIFTA WR (tesamorelin), demonstrated robust growth, driven by increasing recognition of Excess Visceral Abdominal Fat (EVAF) as a serious medical condition and the improved patient experience of the once-weekly EGRIFTA WR.
• A strategic partnership with Ionis Pharmaceuticals expanded Theratechnologies' portfolio into rare diseases in Canada with donidalorsen and olezarsen, projecting significant future revenue and high-margin profitability.
• Despite facing a temporary EGRIFTA SV drug shortage in early 2025 and competitive pressures on Trogarzo, the company achieved a significant financial turnaround, reporting positive adjusted EBITDA and, for the first time, a positive net income in Q2 2024.
• The acquisition by Future Pak, approved by shareholders on September 12, 2025, and receiving final court approval on September 16, 2025, offers a substantial premium to shareholders and validates the value created through Theratechnologies' focused strategy and differentiated assets.

A Niche Innovator's Journey and Strategic Pivot

Theratechnologies Inc., founded in Montreal in 1993, carved a distinct path in the biopharmaceutical landscape by focusing on therapies for unmet medical needs. Its foundational products, EGRIFTA SV for HIV-associated lipodystrophy and Trogarzo for multidrug-resistant HIV-1 infection, established its presence in specialized segments of the HIV market. Around late 2022 to early 2023, the company embarked on a significant strategic pivot, shifting its focus entirely towards scaling its commercial business and achieving sustained profitability. This reorientation, coupled with a disciplined approach to cost management, marked a turning point in the company's financial trajectory.

In the competitive biopharmaceutical industry, Theratechnologies operates as a specialized player, often contrasted with larger, more diversified pharmaceutical giants like Gilead Sciences (GILD), Merck & Co. (MRK), Bristol-Myers Squibb (BMY), and Pfizer (PFE). While these larger entities command extensive resources and broad portfolios across HIV and oncology, Theratechnologies has strategically positioned itself in niche markets where its differentiated therapies can address specific patient populations with high unmet needs. This focused approach has allowed it to develop unique value propositions, particularly in areas like HIV-associated lipodystrophy and multidrug-resistant HIV, where its products offer targeted solutions.

Technological Edge: The Foundation of Value

A cornerstone of Theratechnologies' strategy and competitive moat lies in its differentiated technology, particularly with its tesamorelin franchise and the innovative SORT1+ Technology platform.

EGRIFTA SV, and its successor EGRIFTA WR, represent a key technological differentiator. EGRIFTA WR (tesamorelin) is the only FDA-approved medication specifically for the reduction of excess visceral abdominal fat (EVAF) in adults with HIV and lipodystrophy. This is crucial because EVAF is increasingly recognized by the medical community as a serious condition linked to increased cardiovascular risk and metabolic disease, a fact underscored by data from the VAMOS study. Unlike general weight-loss drugs such as GLP-1s, which primarily reduce Body Mass Index (BMI), EGRIFTA WR specifically targets EVAF while also increasing lean muscle mass, a critical benefit for HIV patients who cannot afford muscle loss. The new F8 formulation, EGRIFTA WR, significantly enhances patient experience by requiring only once-weekly reconstitution, as opposed to daily for EGRIFTA SV, and involves a smaller injection volume and needle. This improved convenience is expected to lead to better patient adherence and duration of treatment, driving continued growth for the franchise. The F8 formulation is patent protected in the U.S. until 2033, providing a long period of market exclusivity.

Beyond its HIV franchise, Theratechnologies has also advanced its SORT1+ Technology platform in oncology. This innovative platform utilizes proprietary peptides to target the sortilin receptor, which is highly expressed in various cancer cells and associated with aggressive disease. The lead investigational peptide-drug conjugate (PDC) candidate, sudocetaxel zendusortide (TH1902), has shown promising preliminary efficacy and safety data in Phase Ib trials for advanced ovarian cancer. Specifically, Part 3 of the trial demonstrated significant tumor reductions, including one patient with complete resolution of a liver lesion, and a reduction in the CA-125 tumor biomarker in four of six patients in the higher dose arm, with no dose-limiting toxicities observed. The FDA has agreed to protocol amendments to increase the dose, indicating confidence in the drug's safety profile. The company is also developing other PDCs using different payloads, such as exatecan, which have shown "extremely good" preclinical data. The SORT1+ platform's ability to induce immune cell infiltration suggests a multimodal mechanism of action, potentially offering advantages over traditional cytotoxic agents. This technological versatility and the meaningful data set generated position the SORT1+ platform as an attractive asset for potential partners, aligning with the company's strategy to seek collaborations for further oncology development.

Financial Turnaround and Growth Drivers

Theratechnologies' strategic pivot yielded a significant financial turnaround, transforming the company into a profitable entity. For fiscal year 2024, the company reported annual revenue of $85.87 million and a positive adjusted EBITDA of $20.2 million, surpassing its upgraded guidance. This marked a substantial improvement from an adjusted EBITDA loss of $3 million in the prior year. The momentum continued into Q1 2025, with total revenues reaching $19 million, a 17% increase year-over-year, and a positive adjusted EBITDA of $2.3 million, compared to a loss in the same period last year. The last 12 months adjusted EBITDA stood at $22.7 million on sales of approximately $89 million, representing a margin over 25%.

EGRIFTA SV has been a primary engine of this growth. In Q1 2025, net sales of EGRIFTA SV surged by 45% year-over-year to $13.9 million. New enrollments were up 15% in Q1 2025 compared to the previous year, and the total number of unique patients saw a year-over-year increase, indicating a strong recovery and demand despite a temporary drug shortage. Gross margins for EGRIFTA consistently remained high, around 90-92%.

In contrast, Trogarzo net sales in Q1 2025 decreased by 22% to $5.2 million, primarily due to the impact of new competitors in the multi-drug resistant HIV segment. However, management anticipates sales to stabilize at this level, with enrollments showing a 16% increase year-to-date over last year, suggesting a leveling off of the decline. Trogarzo's margins remained stable at 48%.

The company's optimized operating structure played a crucial role in achieving positive adjusted EBITDA, even amidst the drug shortage and initial spending on new product filings. This financial discipline, coupled with robust demand for its lead asset, positioned Theratechnologies for sustained profitability.

Expanding Horizons: The Ionis Partnership in Canada

A significant strategic initiative to drive future growth and diversification was the exclusive licensing agreement with Ionis Pharmaceuticals in December 2024. This partnership brought two investigational RNA-targeted medicines, donidalorsen and olezarsen, to the Canadian market for rare disease indications.

Donidalorsen is being evaluated for hereditary angioedema (HAE), a rare and potentially life-threatening genetic disease with an estimated prevalence of less than 1,000 patients in Canada. Olezarsen, already approved in the U.S. as TRYNGOLZA for familial chylomicronemia syndrome (FCS), addresses a rare genetic disease characterized by extremely elevated triglyceride levels, with fewer than 300 patients in Canada and no currently approved treatments. Olezarsen is also undergoing Phase III trials for severe hypertriglyceridemia (SHTG), a more prevalent condition with data expected in the second half of 2025.

The market opportunity for these Ionis products in Canada is substantial, with anticipated revenues exceeding $30 million, potentially doubling with the approval of the SHTG indication. Management projects these new ventures to be highly profitable, with expected EBITDA margins of at least 30%, comparable to the company's overall profitability. Regulatory filings with Health Canada were planned for 2025, with revenue booking estimated to commence in Q1 2027 and peak sales around 2030. This partnership exemplifies Theratechnologies' strategy of in-licensing late-stage products that offer high returns and synergistic fit with its existing commercial infrastructure, particularly in rare diseases in Canada.

Risks and the Road to Acquisition

Despite its commercial successes and strategic expansions, Theratechnologies faced pertinent risks and challenges. A temporary drug shortage of EGRIFTA SV, caused by a voluntary shutdown at a CDMO in late 2024 and early 2025, impacted ex-factory sales and led to a downward revision of 2024 revenue guidance. This shortage was estimated to result in approximately $10 million in lost revenue and a potential additional $1 million to $2 million impact on 2025 sales. However, the company successfully resumed distribution in mid-February 2025 and expedited FDA approvals, mitigating patient-level impact. The transition to the new EGRIFTA WR formulation also presented a challenge in managing payer adoption, which can take up to six months.

Competitive pressures in the multi-drug resistant HIV market continued to affect Trogarzo sales, though stabilization was anticipated. The oncology program, while innovative, required significant investment, leading to an impairment loss in Q4 2024 as the company shifted to a partnership-driven development model to conserve resources.

The company's 2025 guidance reflected these factors, with projected revenues between $80 million and $83 million and adjusted EBITDA between $10 million and $12 million. This guidance incorporated the estimated impact of the drug shortage and the initial spending on the Ionis product filings.

The Culmination: Acquisition by Future Pak

The strategic journey of Theratechnologies culminated in a definitive agreement to be acquired by CB Biotechnology, an affiliate of Future Pak, in July 2025. This transaction, valued at up to $254 million, including contingent value rights, represented a significant premium for shareholders. The acquisition received overwhelming shareholder approval on September 12, 2025, and final court approval on September 16, 2025, with the closing expected around September 25, 2025.

This acquisition validates Theratechnologies' strategic pivot towards commercialization, its success in developing and commercializing differentiated therapies, and its ability to build a robust pipeline through strategic partnerships. The integration into Future Pak's portfolio is expected to expand reach, drive further growth, and enhance patient access for Theratechnologies' innovative products.

Conclusion

Theratechnologies' evolution from a niche biopharmaceutical developer to a commercially focused and profitable entity underscores a compelling investment narrative that ultimately culminated in a strategic acquisition. The company's commitment to addressing unmet medical needs, particularly in HIV-associated lipodystrophy with the highly differentiated EGRIFTA franchise, and its expansion into rare diseases through the Ionis Pharmaceuticals (IONS) partnership, created substantial value. Despite operational challenges like drug shortages and competitive dynamics, the company's disciplined financial management and technological leadership positioned it as an attractive asset. The acquisition by Future Pak represents a significant milestone, validating the strategic direction and the value generated for shareholders, while ensuring the continued advancement of its innovative therapies.