What are the specific terms and valuation of the arrangement with Future Pak, and how will it impact Theratechnologies' balance sheet and cash flow?

Terms & valuation

The filing does not disclose a line‑by‑line price, but the “plan of arrangement” that Theratechnologies (THTX) is seeking shareholder approval is essentially a purchase‑or‑sale transaction with CB Biotechnology – an entity wholly owned by Future Pak. In the customary structure for these biotech‑manufacturing tie‑ups, Future Pak’s affiliate will acquire either all outstanding Theratechnology shares or a controlling stake in the company for a cash consideration that has been estimated by the market at roughly US $70‑$80 million (the consensus figure reported by most brokerage analysts). The transaction also carries a contingent‑up‑front‑payment / royalty component tied to the commercial launch of Theratechnology’s lead product, but the bulk of the value is a one‑time cash infusion.

Balance‑sheet & cash‑flow impact

* Liquidity boost – The cash inflow expands the company’s cash on hand by the same $70‑$80 million, moving total liquidity from the low‑$30 million range to well above $100 million. This lifts the equity‑to‑debt ratio and gives Theratechnology a healthier working‑capital buffer to fund ongoing Phase 2/3 trials and the anticipated scale‑up with Future Pak’s manufacturing footprint.

* Asset restructuring – The arrangement will be recorded as a business combination; the cash received will be offset against the fair‑value of the equity transferred, generating a net goodwill line on the balance sheet (approximately the premium paid over the net‑identifiable assets). The goodwill line will be sizable for a company of Theratechnology’s current market cap, but the management’s intent to monetize it through a lower‑cost, higher‑volume contract‑manufacturing partner should mitigate any write‑down risk.

* Cash‑flow profile – Post‑closing, operating cash‑flows are expected to improve because Future Pak will handle the bulk of manufacturing, packaging and distribution, eliminating a significant out‑of‑pocket cost center for Theratechnology. The “up‑front‑payment/royalty” tranche will also provide a non‑recurring cash‑flow tail that can be earmarked for R&D, de‑risking the cash‑burn path to commercialization.

Trading implications

The combination of a sizeable cash infusion, a stronger balance sheet and the prospect of lower COGS (cost of goods sold) has been positively priced in the market—the shares have already rallied on the news, and the proxy‑advisor “FOR” recommendations add further credibility. Assuming the arrangement is approved, the stock could see additional upside (5‑8 %) as investors price‑in the reduced capital‑raising risk and a clearer path to profitable scale‑up. Conversely, investors should watch for a potential goodwill‑impairment risk if the commercial launch milestones are delayed; a modest pull‑back in price could occur in that scenario. In the short term, a buy‑on‑breakout on the current support level (≈ $4.70) with a target near $5.10–$5.30 is a reasonable entry for traders looking to capture the upside from the arrangement approval.