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Theratechnologies enters new phase of drug testing for tesamorelin
  Lucrative market; Company believes product has wider uses

By JASON MAGDER, The montreal Gazette September 7, 2011

Montreal's Theratechnologies announced Tuesday it has started the second of three stages of clinical trials to give an additional purpose to its drug called tesamorelin.

The drug, which recently received regulatory approval in the United States and Canada to treat a condition of fat buildup among HIV patients known as lipodystrophy, can also be used to combat loss of muscle mass among patients with chronic obstructive pulmonary disorder, the company believes.

If the drug is approved for this treatment, it would be a lucrative market for the company, which estimates there are at least 3 million potential patients worldwide, compared with just 650,000 potential HIV patients.

The Phase 2 trial will be conducted by independent firms in 25 sites in the U.S. and Canada with about 200 patients, including some in Montreal. Results from the trial are expected by the end of next year, and then the company must go through a Phase 3 trial - which tests the drug on a much larger scale. The company hopes to bring this new application of the drug to market by 2016.

John Huss, the company's CEO, said it will cost about $65 million to conduct all the research necessary, a cost that could be split by another partner if the drug is approved.

"In the U.S., there are 1.5 million potential patients out there, and at $900 per patient per year, we could recoup all of that with the first 12,000 or 13,000 patients," Huss said. "We think we can really make money commercializing this drug for five years," after which the patent is set to expire.

Christian Marsolais, the company's vice-president of clinical research and medical affairs, said muscle loss is a serious condition associated with the pulmonary disorder.

"There's a sort of spiral-down effect because the more your lungs are affected, the less activity you can do, and the more muscle mass you will lose," he said. A loss of muscle mass also means a loss of independence for patients, who are eventually no longer able to perform daily chores like shopping for groceries.

He said the company will alter the dosage of tesamorelin to emphasize its anabolic, or muscle building, properties.

Marsolais said the fact tesamorelin was already approved for use with HIV patients, doesn't mean it will automatically be approved for those with chronic obstructive pulmonary disorder.

"It makes it easier in a way," he said. "We already know some of the effects of our drugs, and we know we can increase the dose of the drug, and that's what we're doing."

Theratechnologies came under fire by its shareholders at the company's annual general meeting last May, because although the company earned $21 million in net profit in 2010, most of that was in the form of non-recurring licensing agreements.

Neil Maruoka, an analyst with Canaccord Genuity, said he believes investors should be patient, as the company is in the process of making a major transition, with tesamorelin (known as Egrifta in the U.S.) only now starting to be sold in the U.S., and Canada, and with approvals pending for South America and Europe.

"These product launches ramp slowly," he said. "It's going to be choppy, and it's going to ultimately disappoint right out of the gate, but everything that I have seen suggests that it is on track to be a successful drug."

Shares of Theratechnologies closed up 11 cents, or 2.84 per cent, Tuesday at a price of $3.98.

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