AND ANALYSIS
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CONSOLIDATED STATEMENT OF EARNINGS
Years ended November 30
(in thousands of dollars, except per share amounts) | 2009 | 2008* | 2007* | |||||||||
Revenues | $ | 19,720 | $ | 2,641 | $ | 3,134 | ||||||
Research and development before tax credits | $ | 22,226 | $ | 35,326 | $ | 31,866 | ||||||
Operating loss before realized loss on impairment of available-for-sale financial assets | $ | (15,058 | ) | $ | (48,033 | ) | $ | (37,611 | ) | |||
Net loss | $ | (15,058 | ) | $ | (48,611 | ) | $ | (37,668 | ) | |||
Basic and diluted loss per share | $ | (0.25 | ) | $ | (0.85 | ) | $ | (0.72 | ) | |||
At November 30
(in thousands of dollars) | 2009 | 2008* | 2007* | |||||||||
Liquidities (cash and bonds) | $ | 63,362 | $ | 46,337 | $ | 60,368 | ||||||
Tax credits receivable | $ | 1,666 | $ | 1,784 | $ | 1,418 | ||||||
Total assets | $ | 69,487 | $ | 53,545 | $ | 73,649 | ||||||
Capital stock | $ | 279,169 | $ | 269,219 | $ | 238,842 | ||||||
Shareholders’ equity | $ | 43,048 | $ | 46,347 | $ | 65,036 | ||||||
* | Information restated following the adoption of the Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3064, Goodwill and Intangible Assets. |
NON-GAAP MEASURES
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(in thousands of dollars) | Fourth quarter | Year | ||||||||||||||
2009 | 2008* | 2009 | 2008* | |||||||||||||
Net loss, per the financial statements | $ | (4,698 | ) | $ | (15,145 | ) | $ | (15,058 | ) | $ | (48,611 | ) | ||||
Adjustments: | ||||||||||||||||
Revenues associated with a Collaboration and Licensing Agreement (note 7 to the consolidated financial statements) | (1,711 | ) | — | (17,444 | ) | — | ||||||||||
Fees associated with a Collaboration and Licensing Agreement | — | — | 4,269 | — | ||||||||||||
Adjusted net loss | $ | (6,409 | ) | $ | (15,145 | ) | $ | (28,233 | ) | $ | (48,611 | ) | ||||
(in thousands of dollars) | Fourth quarter | Year | ||||||||||||||
2009 | 2008* | 2009 | 2008* | |||||||||||||
Burn rate before changes in operating assets and liabilities, per the financial statements | $ | (4,333 | ) | $ | (9,559 | ) | $ | (13,547 | ) | $ | (41,592 | ) | ||||
Adjustments: | ||||||||||||||||
Revenues associated with a Collaboration and Licensing Agreement (note 7 to the consolidated financial statements) | (1,711 | ) | — | (17,444 | ) | — | ||||||||||
Fees associated with a Collaboration and Licensing Agreement | — | — | 4,269 | — | ||||||||||||
Adjusted burn rate before changes in operating assets and liabilities | $ | (6,044 | ) | $ | (9,559 | ) | $ | (26,722 | ) | $ | (41,592 | ) | ||||
* | Information restated following the adoption of the CICA Handbook Section 3064, Goodwill and Intangible Assets. |
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(in thousands of dollars, except per share amounts) | 2009 | 2008 | ||||||||||||||||||||||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||||||
Revenues | $ | 2,246 | $ | 13,148 | $ | 2,317 | $ | 2,009 | $ | 616 | $ | 710 | $ | 716 | $ | 599 | ||||||||||||||||
Net loss (net earnings) | $ | (4,698 | ) | $ | 5,824 | $ | (5,430 | ) | $ | (10,754 | ) | $ | (15,145 | ) | $ | (11,220 | ) | $ | (11,382 | ) | $ | (10,864 | ) | |||||||||
Basic and diluted loss (earnings) per share | $ | (0.08 | ) | $ | 0.10 | $ | (0.09 | ) | $ | (0.18 | ) | $ | (0.26 | ) | $ | (0.19 | ) | $ | (0.20 | ) | $ | (0.20 | ) | |||||||||
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Less than | 1 to 5 | Over | ||||||||||||||
(in thousands of dollars) | Total | 1 year | years | 5 years | ||||||||||||
Operating lease | $ | 6,576 | $ | 340 | $ | 2,020 | $ | 4,216 | ||||||||
A) | SHAREHOLDER RIGHTS PLAN |
On February 10, 2010, the Company’s Board of Directors adopted a shareholder rights plan (the “Plan”), effective as of such date. The Plan is designed to provide adequate time for the Board of Directors, and the shareholders, to assess an unsolicited takeover bid for Theratechnologies. In addition, the Plan provides the Board of Directors with sufficient time to explore and develop alternatives for maximizing shareholder value if a takeover bid is made, as well as provide shareholders with an equal opportunity to participate in a takeover bid to receive full and fair value for their common shares (the “Common Shares”). The Plan, if approved by the shareholders, will expire at the close of the Company’s annual meeting of shareholders in 2013. | ||
The rights issued under the Plan will initially attach to and trade with the Common Shares and no separate certificates will be issued unless an event triggering these rights occurs. The rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20% or more of the outstanding Common Shares without complying with the “Permitted Bid” provisions of the Plan or without approval of the Board of Directors. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase Common Shares at a 50% discount to the market price at the time. |
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Under the Plan, a Permitted Bid is a bid made to all holders of the Common Shares and which is open for acceptance for not less than 60 days. If at the end of 60 days at least 50% of the outstanding Common Shares, other than those owned by the offeror and certain related parties have been tendered, the offeror may take up and pay for the Common Shares but must extend the bid for a further 10 days to allow other shareholders to tender. |
B) | GRANTING OF STOCK OPTIONS | |
On December 8, 2009, the Company granted 265,000 options at an exercise price of $3.84 per share and cancelled 19,167 options at a weighted exercise price of $2.38 per share in connection with its stock option plan. |
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(in thousands of Canadian dollars) | November 30, 2009 | |||||||||||
$US | EUR | GBP | ||||||||||
Cash | 1,471 | — | — | |||||||||
Accounts receivable | — | 4 | — | |||||||||
Accounts payable and accrued liabilities | (1,095 | ) | — | (25 | ) | |||||||
Balance sheet elements exposed to foreign currency risk | 376 | 4 | (25 | ) | ||||||||
Average | Reporting | |||||||
rate | date | |||||||
$US — $CAN | 1.0594 | 1.0556 | ||||||
EUR — $CAN | 1.5808 | 1.5852 | ||||||
GBP — $CAN | 1.7597 | 1.7366 | ||||||
(in thousands of Canadian dollars) | $US | EURO | GBP | |||||||||
Increase net loss | 19 | — | (1 | ) | ||||||||
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ADOPTION OF NEW ACCOUNTING STANDARDS
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• | receipt of regulatory approvals of tesamorelin for the treatment of excess abdominal fat in HIV-infected patients with lipodystrophy from the FDA and other regulatory agencies; | ||
• | market acceptance of the product by the medical community, patients and third-party payers (such as governmental health administration authorities and private health coverage insurers); | ||
• | entering into one or more strategic alliance agreements with one or more partners or building a marketing and sales force in countries other than the United States to help with the regulatory approval and/or the marketing and sale of tesamorelin for the treatment of excess abdominal fat in HIV-infected patients with lipodystrophy in those countries; | ||
• | in the United States, the amount of resources used by the Company’s commercial partner to commercialize tesamorelin; | ||
• | maintaining manufacturing and supply agreements to ensure the availability of commercial quantities of tesamorelin through validated processes; | ||
• | the number of competitors in the market; and | ||
• | protecting the Company’s intellectual property and avoiding patent infringement claims. |
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• | the exact timing of the launch of tesamorelin in the United States, if approved by the FDA; | ||
• | the limited control by the Company on the amount and timing of resources that its commercial partner will be devoting to the commercialization, marketing and distribution of tesamorelin, which could adversely affect the Company’s ability to obtain or maximize its royalty payments; | ||
• | disputes or litigation that may arise between the Company and its commercial partner, which could adversely affect the commercialization of tesamorelin in the United States, all of which will divert the attention of Company’s Management and its resources; | ||
• | its commercial partner not properly defending the Company’s intellectual property rights or using them in such a way as to expose the Company to potential litigation, which could, in both cases, adversely affect the value of the Company’s intellectual property rights; | ||
• | corporate reorganizations or changes in business strategies of its commercial partner, which could adversely affect such commercial partner’s willingness or ability to fulfill its obligations under the Collaboration and Licensing Agreement; | ||
• | the termination of the Collaboration and Licensing Agreement, which would adversely affect the commercialization of tesamorelin for the treatment of excess abdominal fat in HIV-infected patients with lipodystrophy in the United States. |
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• | acceptance of a product by physicians and patients as safe and effective treatments; | ||
• | product price; | ||
• | the effectiveness of the Company’s sales and marketing efforts (or those of its commercial partners); | ||
• | storage requirements and ease of administration; | ||
• | dosing regimen; | ||
• | safety and efficacy; | ||
• | prevalence and severity of side effects; and | ||
• | competitive products. |
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