Theratechnologies Inc. (TH) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn the meeting over to Dawn Svoronos, Chair of the Board. The floor is yours.

Good morning, everyone, and welcome to the Annual Meeting of Shareholders of Theratechnologies. [Foreign Language] My name is Dawn Svoronos, and I'm the Chair of the Board of Theratechnologies. I'll be presiding over the meeting today. The following persons of the corporation are also present at the meeting. Paul Lévesque, President and CEO of Theratechnologies; Philippe Dubuc, Senior Vice President and Chief Financial Officer; Jocelyn Lafond, Vice President, Legal Affairs and Corporate Secretary; Denis Boucher, Vice President, Communications and Corporate Affairs; and Christian Marsolais, Senior Vice President and Chief Medical Officer. [Foreign Language] As a result of the ongoing current COVID-19 pandemic, this meeting is being held virtually via a live audio webcast. Here are a few guidelines for the orderly conduct of the meeting in these exceptional circumstances. First, the meeting will be conducted in English, given that a large amount of U.S. shareholders have logged into the meeting. During the question period, we'll be answering questions in the language they are asked in. Secondly, for the purposes of the meeting today, voting on all matters by registered shareholders and duly appointed proxy holders will be conducted by electronic ballot. If you have already voted using the proxy form or a voting information form sent to all shareholders, then no further action is required on your part. Please note that if you choose to vote again, only your vote cast during the meeting will be counted, and the vote that you submitted by proxy will be revoked. The poll will be open for all motions and resolutions at the same time. This will allow you to choose to vote on each motion and resolution immediately or to wait until the conclusion of discussion prior to casting your vote. Once discussion on all items of business has concluded, we'll give you a minute to record your vote on the online platform in case you've not already done so and then declare voting closed on all resolutions. Once the electronic balloting closes, the voting page will disappear and your votes will automatically be submitted. Questions in respect of a business item for which a vote will be taken can be submitted at any time throughout the meeting by any registered shareholder or duly appointed proxy holder using the instant messaging service of the virtual interface. Those of you who joined the meeting as guests only will not be able to ask questions. [Operator Instructions] Please note that there will be a slight delay in the publication of the communications received. Questions will generally be addressed during the question period at the end of the meeting with the exception that questions regarding procedural matters or directly related to a specific motion may be addressed during the meeting. Results of the votes on each business item will be compiled by the scrutineers at the end of the meeting and will be communicated by press release after the meeting. The final voting results will also be filed on the SEDAR and EDGAR website. We'll now proceed with the formal portion of today's meeting. To expedite this formal part of the meeting, I will move the motion and Philippe Dubuc will second them. I confirm that we are both shareholders of the corporation. I now declare the polls open on all resolutions. I now ask that the Annual Meeting of Shareholders of the corporation comes to order. I appoint Jocelyn Lafond, Vice President, Legal Affairs and Corporate Secretary as Secretary of the meeting. For the purposes of this meeting, I appoint Computershare Trust Company of Canada through its representatives as scrutineers to compute the votes on any polls taken at this meeting as you report thereon to the secretary of the meeting. The purposes of today's meeting are set out in the management proxy circular of the corporation dated April 12, 2021. I have been advised that the notice of meeting, the management proxy circular and the form of proxy or voting instruction form as applicable were mailed to shareholders on or around April 16, 2021, and that the audited consolidated financial statements of the corporation for the fiscal year ended November 30, 2020, and the related MD&A were mailed to shareholders of the corporation who requested such statements and the related MD&A on or around March 10, 2021. Unless there is any objection, I will dispense with the reading of the notice of meeting. Copies of the management proxy circular and other meeting materials are available under the corporation's website and under the corporation's profile on the SEDAR and EDGAR websites. Our transfer agent, Computershare Trust Company of Canada as requested -- has attested to the proper mailing of the notice of meeting. Proof of service of such mailing has been provided to me by the corporation's transfer agent. I direct that a copy of such proof of service be annexed to the minutes of this meeting. I've been advised that persons representing more than 10% of the aggregate number of votes attached to all common shares for the meeting are present or duly represented by proxy at the meeting, and therefore, a quorum of shareholders of the corporation is present, and the meeting is properly called and duly constituted for the transaction of business. I have received the scrutineers' report, and I direct that their formal report be annexed to the minutes of this meeting. I've read the minutes of last year's Annual Meeting of Shareholders, and I'm satisfied with their content. I propose a motion to exempt the secretary of the corporation from reading last year's minutes and to adopt said minutes.

I second this motion.

As the first item of business on the agenda for today's meeting, I now present to the meeting the audited consolidated financial statements of the corporation as at and for the fiscal year ended November 30, 2020, together with the auditor's report to the shareholders thereon. Copies of such documents have been mailed to the shareholders who requested such statements and are available on our website and under the corporation's profile on the SEDAR and EDGAR website. The next item of business is the election of directors. The number of directors to be elected at the meeting is set at 8, and each director will hold office until the close of business at the next Annual Meeting of Shareholders of the corporation following election or until his or her successor is elected or appointed. Each of the persons nominated has confirmed that he or she is prepared to serve as a director. The nominees to act as directors of the corporation for the ensuing year are: Joseph Arena; Gérald Lacoste; Paul Lévesque; Gary Littlejohn; Andrew Molson; Alain Trudeau; Dale Weil; and myself, Dawn Svoronos. To date, more than 50% of all of the issued and outstanding common shares have been voted for. These nominees and the percentage of votes received for each of them is as follows: Joseph Arena, 94.13% for; Gérald Lacoste, 77.81% for; Paul Lévesque, 95.56% for; Gary Littlejohn, 75.41% for; Andrew Molson, 87.50% for; Alain Trudeau, 87.60% for; Dale Weil, 87.45% for; Dawn Svoronos, 88.95% for. I propose a motion for the nomination of the following persons as directors of the corporation. Joseph Arena; Gérald Lacoste; Paul Lévesque; Gary Littlejohn; Andrew Molson; Alain Trudeau; Dale Weil; and myself, Dawn Svoronos.

I second this motion.

Are there any questions regarding the motion? Since no question has been received on this matter, we'll now vote on the election of each candidate. I would ask each registered shareholder and duly appointed proxy holder to cast their vote. Please register your votes by accessing the voting page and selecting the for or withhold buttons next to the name of each proposed director. [Voting]

While the votes are being cast, we'll move on to the next item of business. Next item of business is the appointment of the auditors of the corporation for the ensuing year and the authorization that compensation for their services be determined by the Board of Directors of the corporation. The corporation recommends that KPMG Chartered Professional Accountants be appointed as auditors of the corporation for the current fiscal year. To date, more than 50% of the issued and outstanding common shares have been voted and 91.21% of those votes were cast for the appointment of KPMG as auditors of the corporation and to authorize the directors to set their compensation. I propose a motion for the appointment of KPMG as auditors of the corporation and to authorize the directors to set their compensation.

I second this motion.

Are there any questions regarding the motion? Since no question has been received with respect to this matter, we will now vote on this motion, and I would ask each registered shareholder and duly appointed proxy holder to cast their votes. Please register your votes by accessing the voting page and selecting the for or withhold buttons next to the resolution that appoints KPMG as the auditors of the corporation and to authorize the directors to set their compensation. [Voting]

The polls are now closed, and no vote can be entered at this time on any of the resolutions requiring your vote. I've been asked by the scrutineers that the ballots and proxies deposited for the meeting have been voted in favor of all the business matters identified in the notice of the meeting. I thus declare the election of the directors of the corporation proposed in the management proxy circular for the ensuing year; the appointment of KPMG as the auditors of the corporation for the ensuing year; and the authorization of the directors of the corporation to set their compensation. I direct that the results of the poll will be included in the minutes of this meeting and that the voting results be announced in a press release in accordance with the policies of the TSX and filed on the SEDAR and EDGAR website. The formal items of business as set out in the notice of meeting are now complete. We will now proceed with our review of the salient business activities that occurred during the 2020 fiscal year and provide you with our perspective for 2021. Good day, everyone, and thank you for joining today's Annual Meeting of Shareholders. As noted by the company throughout the past year, Theratechnologies has been going through quite a transformation, not only having to adjust to its practices to adapt to the global COVID-19 pandemic, but also evolving the company and building a pathway for long-term growth. And for this, I hope that you are every bit as enthusiastic as I am, and looking back at what Theratechnologies has accomplished over the past year. I'd like to give kudos to the entire team for coming together and showing their strength, solidarity and resilience while responding to rapid change and a challenging all around environment. Theratechnologies also welcomed a new President and CEO at the very beginning of the global pandemic. I want to take this opportunity to recognize Paul in his first year of leadership for a job well done. Upon assuming his new role, Paul immediately set out to address the new commercial imperatives raised by the pandemic and to accelerate the development of our research pipeline in NASH and oncology. Paul quickly realized the synergies between Theratechnologies present business and its future opportunity. He implemented a strategic operating plan aligned with the company's redefined mission and values that could address the company's full commercial and R&D potential. Also in 2020, the Board composition of Theratechnologies evolved. Its ranks were bolstered by the addition of Alain Trudeau and Andrew Molson as Independent Directors. Both Alain and Andrew are well recognized and respected business leaders with the expertise and vision to support the company through its next stage of development and growth. I'm also very pleased to welcome Dr. Joseph Arena as a new member of the Board. For nearly 30 years, Joseph has had an illustrious career, holding various strategic leadership roles in the pharmaceutical industry, including Head of Regulatory Affairs across lines of business with Merck and Pfizer, respectively. He brings a strong scientific acumen that will be invaluable to the company as we continue to advance the R&D pipeline in oncology, NASH and HIV. In addition, Joseph brings a wealth of product management, regulatory and commercialization experience due to his drug development work in biopharma. I would also like to give a sincere and special thank you to Paul Pommier and Sheila Frame as they step down from the Board. Paul, as many of you may know, served on the board for nearly 20 years, including as Chair from 2007 to 2013. We wish to thank both our colleagues for their invaluable contributions to Theratechnologies. Lastly, on behalf of the Board of Directors, I want to reiterate our support for the entire technologies team, particularly in regards to their success, accelerating the pipeline and realigning the commercial business. We're confident that the appropriate strategic initiatives have been put in place, and we're very enthusiastic and optimistic about the company's future prospects and the value that it will bring to you, our shareholders. Lastly, I would like to thank all of our shareholders, both new and long term for their continued support. With that, I will turn the call over to Paul for his remarks.

Thank you so much, Dawn, for the introduction, and hello, everyone. Thank you for taking the time to virtually join us for this year's AGM. [Foreign Language] I want to first take this opportunity to reiterate how pleased I am with our accomplishments over the last year, especially among the time where a global pandemic challenge our business. Through this unforeseen period of uncertainty, we quickly executed a plan to strengthen our operations in order to better manage and serve our business model, while also building and implementing a strategy to support the company's future growth and resilience. We exited 2020 as a stronger, more focused and aligned organization with the determination to develop our R&D pipeline, while continuing to enhance our commercial HIV franchise. I am pleased that the momentum and progress that we built in 2020 has carried over with us into the new year. In doing so, we have continued to foster initiatives that will promote sustainable growth for the company for years to come. We continue to support our existing revenue stream by adding new capabilities to the commercial HIV franchise business; and our R&D pipeline of novel assets in oncology, NASH and HIV, continues to progress with value-driving milestones approaching in 2021 and '22. Our notable R&D milestones to date in oncology include receiving Fast Track designation by the FDA, for our investigational lead peptide drug conjugate, TH1902, in all sorted and expressing solid tumors and the initiation of the Phase I clinical trial of TH1902 ahead of schedule. We see these as very promising steps to support the clinical development of our SORT1+ technology program. Although we are in the early days of the trial, we are pleased with how swiftly it is progressing. In NASH, we are moving closer towards initiating our Phase III trial in the third quarter of 2021. We believe we are well positioned as we joined some of the very few companies in late-stage development for this serious medical condition. Tesamorelin mechanism of action as a growth hormone releasing hormone or GHRH is a highly differentiated treatment approach because it targets the underlying cause of NASH through stimulating endogenous reduction of GH. Another key differentiator of our Phase III NASH program is that it is somewhat derisked as tesamorelin has an extensive 10-plus year product history with an identified dose and with a well-documented safety and tolerability profile. Turning to our second strategic imperative, enhancing our commercial HIV franchise, we continue to seek innovative ways to drive top line growth of our commercial business. We have developed and continued to execute the strategic plan to support our sales, marketing and engagement organizations. We are also working on the development of next-generation delivery methods for EGRIFTA SV, Trogarzo to manage our HIV product life cycle well into the future. As we move further into 2021, we believe that we are in a very strong position to support our mission to bring to market, new treatment options to health care providers and patients by developing and commercializing innovative therapies in areas of high unmet need. In line with these initiatives, and as we reported in April, we bolstered our commercial capabilities with the hires of John Leasure as Global Commercial Officer; and Peter Kowal as Vice President, HIV U.S. commercial operations. John and Peter have hit the ground running to lead and support our sales and marketing infrastructure on a global scale. We have also strengthened a number of other operational functions within the organization with the addition of talented industry professionals to enhance our clinical, human capital and technology capabilities. But with all of that being said, we recognize that there is work to be done to ensure that the Theratechnologies that we value achieve the same value from the investment community. To that end, we are working diligently to articulate and deliver our story to the proper audiences, attract and retain quality, long-term focused analysts and investors and strengthen our corporate brand on a global scale. This is a top priority for us, and we are committed to executing our strategy on this front. Taking into account the pipeline alone, there is an incredible opportunity ahead of this company. Adding to that, the additional value that we believe we can achieve from our commercial line of business, and we are confident that Theratechnologies can build an investment profile similar to many of our small cap biopharma peers and create sustainable long-term value for all of our stakeholders. Before I conclude today's remarks, I want to extend my thanks and gratitude to the entire Theratechnologies team. Without their hard work and tenacity, we would not have accomplished our objectives during a year of uncertainty and unrest. I also want to give a big thanks to our Board of Directors who continue to provide their support and guidance, especially to our Chair, Dawn Svoronos; and to our retiring Board members, Sheila Frame and Paul Pommier, for their years of service and contribution. I also want to welcome Dr. Joseph Arena to the Board. Finally, I want to give a heartfelt thank you to our shareholders for their continued support. And with that, we will now open the call to take your questions.

Thank you, Paul. As Paul said, we'll proceed with the question-and-answer period. I ask that all registered shareholders and duly appointed proxy holders who would like to ask a question use the instant messaging feature of the virtual interface to do so. A member of management or myself as appropriate, will respond. [Operator Instructions] Given that there are no questions, this concludes today's agenda. Thank you for attending today and for your support of Theratechnologies.

This concludes the meeting. You may now disconnect.