MONTREAL - Theratechnologies shares took a beating Wednesday as the specialty pharmaceutical company lost $1.7 million in the fourth quarter and failed to provide a sales guidance for the year.
The Montreal-based company lost three cents per share for the period ended Nov. 30. That compared to a profit of 35 cents per share a year ago, or $21.3 million.
Even though the results beat analyst forecasts, Theratechnologies shares plummeted nearly 14 per cent in afternoon trading on the Toronto Stock Exchange. They were down 36 cents at $2.26. Over the past year, they peak at $5.80.
Theratechnologies (TSX:TH) revenues in the quarter were $4.4 million, down from $26.7 million a year ago when it received a US$25 million milestone payment related to a licensing agreement with EMD Serono.
Analysts had expected the company to lose six cents per share on $3.3 million of revenues during the quarter on higher forecast R&D spending and lower manufacturing revenue of its drug EGRIFTA.
The injectable prescription medicine reduces the excess in abdominal fat in HIV-infected patients with lipodystrophy.
Net research and development expenses for the quarter decreased 36 per cent to $2 million, while general and administrative expenses dipped to $1.8 million.
Selling and market development expenses fell 30 per cent to $530,000, primarily because distribution and licensing agreements with Sanofi and Ferrer transferred responsibility for all marketing expenses to these licensees.
For the full year, the company lost $17.7 million or 29 cents per share, compared to net earnings of $8.9 million or 15 cents per share in 2010.
Research expenses dropped 22 per cent to $11 million as it restructured the operations in June by relying more on external partners in the private and public sectors.
The restructuring led to the layoff of one quarter of its workforce or 24 employees.
In December it laid off another 37 workers as it discontinued the clinical program evaluating tesamorelin in muscle wasting associated with chronic obstructive pulmonary disease (COPD).
The move is part of efforts to save about $10 million in 2012.
Chief executive Michel Huss called 2011 a year of change and transformation for Theratechnologies.
"We achieved measurable progress on several fronts as we continued to maximize the commercial potential of EGRIFTA and to work on the development of a second generation growth-hormone releasing factor," he stated.
Pooya Hemami of Desjardins Capital Markets said the results were negative.
"Overall, while fourth-quarter revenue was in line, we believe that short-term sentiment will be weighed down by the lack of fiscal 2012 revenue guidance," she said in a report.
Another negative factor was the underlying tone of the conference call, which signalled that trends in recent months have yet to show an upward inflection point in EGRIFTA sales momentum.