Exhibit 99.2
 
 Forward-Looking Information
 EGRIFTA TM EGRIFTA TM EGRIFTA TM
 EGRIFTA TM EGRIFTA TM EGRIFTA TM EGRIFTA TM
 EGRIFTA TM EGRIFTA TM EGRIFTA TM




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Managements Discussion and Analysis
 EGRIFTA TM EGRIFTA TM
    Overview
 EGRIFTA EGRIFTA
 EGRIFTA EGRIFTA EGRIFTA
 - 2 -




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EGRIFTA
 EGRIFTA EGRIFTA
 EGRIFTA EGRIFTA
 EGRIFTA EGRIFTA EGRIFTA TM
 EGRIFTA EGRIFTA EGRIFTA
  EGRIFTA TM
  Financial Position
  - 3 -




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Economic Environment
    Perspectives for 2011
 EGRIFTA TM
 
    
    Support our commercial partner, EMD Serono, in commercializing EGRIFTATM
in the United States;
    
    Support our commercial partner, Sanofi, in seeking regulatory approval of
EGRIFTATM in Latin America, Africa and the Middle-East for potential
commercialization;
    
    Support our commercial partner, Ferrer, in seeking regulatory approval of
EGRIFTATM in Europe, Russia, South Korea, Taiwan, Thailand and certain central
Asian countries for potential commercialization;
    
    Assess expansion opportunities into other territories where EGRIFTATM
could be used for the reduction of excess abdominal fat in HIV-infected patients with
lipodystrophy;
    
    Initiate a new clinical program evaluating tesamorelin in a new indication;
    
    Continue working on EGRIFTATM. We have developed a new presentation of
EGRIFTATMwhich is easier to use than its current presentation. This new
presentation complies with one of the FDAs post-approval requirements. See Post-Approval
Commitments; and
    
    Develop a new formulation for EGRIFTATM pursuant to our agreement with
EMD Serono.
 - 4 -




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Selected Annual Information
 Consolidated statement of comprehensive incomeYEARS ENDED NOVEMBER 30 (in thousands ofCanadian dollars, except per share amounts)
    
    2010
    
    
    2009
    
    
    2008(1)Revenue(2)
    
    $
    31,868
    
    
    $
    17,468
    
    
    $
    2,641Research and development expenses, net of tax credits
    
    $
    14,064
    
    
    $
    20,810
    
    
    $
    33,215Results from operating activities
    
    $
    6,663
    
    
    $
    (16,747
    )
    
    $
    (48,611
    )Net financial income
    
    $
    2,381
    
    
    $
    1,591
    
    
    
    Net profit (loss)
    
    $
    8,930
    
    
    $
    (15,156
    )
    
    $
    (48,611
    )Basic and diluted earnings (loss) per share
    
    $
    0.15
    
    
    $
    (0.25
    )
    
    $
    (0.85
    )
 Consolidated statement of financial positionAT NOVEMBER 30 (in thousands of Canadiandollars)
    
    2010
    
    
    2009
    
    
    2008(1)Liquidities (cash and bonds)
    
    $
    64,550
    
    
    $
    63,362
    
    
    $
    46,337Tax credits and grants receivable
    
    $
    332
    
    
    $
    1,333
    
    
    $
    1,784Total assets
    
    $
    71,651
    
    
    $
    69,154
    
    
    $
    53,545Total share capital
    
    $
    279,398
    
    
    $
    279,169
    
    
    $
    269,219Total equity
    
    $
    52,656
    
    
    $
    43,048
    
    
    $
    46,347
 
 (1)
    
    We adopted IFRS in fiscal 2010 with a transition date of December 1, 2008.
Consequently, the selected financial information for the year ended November 30, 2008, as
presented in our 2009 Audited Consolidated Financial Statements, which were presented in conformity
with Canadian GAAP, was not restated in terms of IFRS and accordingly, is not comparable with the
information for fiscal 2010 and 2009. See Conversion to IFRS for the policy differences between
Canadian GAAP and IFRS.(2)
    
    Revenue in 2008 includes interest income of $2,427,000. Revenue in 2009 includes a
milestone payment of $10,884,000 received from EMD Serono following the FDAs acceptance to file
our NDA for EGRIFTATM. Revenue in 2010 includes a milestone payment of $25,000,000
received from EMD Serono following marketing approval of EGRIFTATM by the FDA. - 5 -




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Operating Results
 Revenue
 EGRIFTA TM EGRIFTA TM
  EGRIFTA TM EGRIFTA TM
 R&D Activities
 EGRIFTA TM
 Cost of Sales
 EGRIFTA TM
 - 6 -




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EGRIFTA TM
 General and Administrative Expenses
   Selling and Market Development Expenses
   Net Financial Income
  Net Results
  - 7 -




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Quarterly Financial Information
   2010
    
    
    2009Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1Revenue
    
    $
    26,717
    
    
    $
    1,717
    
    
    $
    1,717
    
    
    $
    1,717
    
    
    $
    1,718
    
    
    $
    12,601
    
    
    $
    1,717
    
    
    $
    1,432Net profit (net loss)
    
    $
    21,299
    
    
    $
    (3,357
    )
    
    $
    (4,771
    )
    
    $
    (4,241
    )
    
    $
    (4,654
    )
    
    $
    5,779
    
    
    $
    (5,454
    )
    
    $
    (10,827
    )Basic and diluted
earnings (loss) per
share
    
    $
    0.35
    
    
    $
    (0.06
    )
    
    $
    (0.08
    )
    
    $
    (0.07
    )
    
    $
    (0.08
    )
    
    $
    0.10
    
    
    $
    (0.09
    )
    
    $
    (0.18
    )
 EGRIFTA TM EGRIFTA TM
 Fourth Quarter Comparison
 EGRIFTA TM
 EGRIFTA TM
 EGRIFTA TM
  - 8 -




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Liquidity and Capital Resources
        - 9 -




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EGRIFTA TM
 Contractual Obligations
 Commitments
  November 30,
    
    
    November 30,
    
    
    December 1,(in thousands of Canadian dollars)
    
    2010
    
    
    2009
    
    
    2008Less than one year
    
    
    55
    
    
    
    340
    
    
    
    816Between one and five years
    
    
    2,239
    
    
    
    2,020
    
    
    
    340More than five years
    
    
    3,943
    
    
    
    4,216
    
    
    
    6,237
    
    
    
    6,576
    
    
    
    1,156
 Long-Term Procurement Agreements
 EGRIFTA TM
 Credit Facility
  Post-Approval Commitments
  
    
    a single vial formulation of EGRIFTATM (the development of a new presentation of the
same formulation);
    
    a long-term observational safety study using EGRIFTATM; and
    
    a Phase 4 clinical trial using EGRIFTATM.
 EGRIFTA TM EGRIFTA TM
 - 10 -




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EGRIFTA TM EGRIFTA TM EGRIFTA TM .
 Contingent Liability
 EGRIFTA TM
   Off-Balance Sheet Arrangements
  Subsequent Events
 Distribution and Licensing Agreements
 EGRIFTA TM
 EGRIFTA TM EGRIFTA TM
 - 11 -




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EGRIFTA TM
 EGRIFTA TM
 EGRIFTA TM EGRIFTA TM EGRIFTA TM EGRIFTA TM EGRIFTA TM
 Deferred Share Unit Plan
 ,
 Stock Option Plan
  - 12 -




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Financial Risk Management
  Credit Risk
  .
 Liquidity Risk
    Currency Risk
    - 13 -




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November 30,2010(in thousands of dollars)
    
    $US
    
    
    EURO
    
    
    GBPCash
    
    
    26,424
    
    
    
    
    
    
    
    1Trade and other receivables
    
    
    
    
    
    
    
    
    
    
    Accounts payable and accrued liabilities
    
    
    (465
    )
    
    
    (26
    )
    
    
    (81
    )Items exposed to currency risk
    
    
    25,959
    
    
    
    (26
    )
    
    
    (80
    )
  Average rate
    
    Reporting date rate$US  C$
    
    
    1.0345
    
    
    
    1.0266EURO  C$
    
    
    1.3848
    
    
    
    1.3326GBP  C$
    
    
    1.6051
    
    
    
    1.5969
  (in thousands of dollars)
    
    $US
    
    EURO
    
    GBPIncrease in net profit
    
    
    1,298
    
    
    
    (1
    )
    
    
    (4
    )
  Interest Rate Risk
   - 14 -




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Financial Instruments
   Critical Accounting Estimates
 Use of Estimates and the Exercise of Judgment
   
  - 15 -




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Conversion to IFRS
   First-time Adoption of International Financial
Reporting Standards .
   (i) IFRS 2  Share-based Payment: , Share-based Payment
 (ii) Designation of financial assets and financial liabilities exemption:
 - 16 -




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Estimates

 Impact of IFRS on the Companys Financial Statements
   IFRS 2, Share-based Payment (IFRS 2)
  IAS 36, Impairment of Assets (IAS 36)
  IAS 1, Presentation of Financial Statements (IAS 1)
  Other Standards
  - 17 -




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Impact on the Business
  Impact on Information Systems and Technology
  Impact on Internal Control over Financial Reporting and Disclosure Controls and Procedures
  Impact on Financial Reporting Expertise
  New accounting policies
  Annual improvements to IFRS
  - 18 -




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(i)
    
    IFRS 3:Revision to IFRS 3, Business Combinations:
 Effective for annual periods beginning on or after July 1, 2010 with earlier adoption
permitted.Clarification on the following areas:
 
    
    the choice of measuring non-controlling interests at fair value or at the
proportionate share of the acquirees net assets applies only to instruments that
represent present ownership interests and entitle their holders to a proportionate
share of the net assets in the event of liquidation. All other components of
non-controlling interest are measured at fair value unless another measurement basis is
required by IFRS.
    
    application guidance relating to the accounting for share-based payments in IFRS 3
applies to all share-based payment transactions that are part of a business
combination, including un-replaced awards (i.e., unexpired awards
over the acquiree shares that remain outstanding rather than being replaced by the acquirer) and
voluntarily replaced share-based payment awards.
 (ii)
    
    IFRS 7:
 Amendment to IFRS 7, Financial Instruments: Disclosures:Effective for annual periods beginning on or after January 1, 2011 with earlier
adoption permitted.Multiple clarifications related to the disclosure of financial instruments and in
particular in regards to transfers of financial assets.
 (iii)
    
    IAS 1:
 Amendment to IAS 1, Presentation of Financial Statements:Effective for annual periods beginning on or after January 1, 2011 with earlier
adoption permitted.Entities may present the analysis of the components of other comprehensive income
either in the statement of changes in equity or within the notes to the financial
statements.
 (iv)
    
    IAS 27:
 Amendment to IAS 27, Consolidated and Separate Financial Statements:Effective for annual periods beginning on or after January 1, 2011 with earlier
adoption permitted.The 2008 revisions to this standard resulted in consequential amendments to IAS 21,The Effects of Changes in Foreign Exchange Rates, IAS 28, Investments in Associates,
and IAS 31, Interests in Joint Ventures.IAS 27 now provides that these amendments are
to be applied prospectively.
 (v)
    
    IAS 34:
 Amendment to IAS 34, Interim Financial Reporting:Effective for annual periods beginning on or after January 1, 2011 with earlier
adoption permitted.The amendments place greater emphasis on the disclosure principles for interim
financial reporting involving significant events and transactions, including changes to
 - 19 -




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fair value measurements and the need to update relevant information from the most
recent annual report.
 New or revised standards and interpretations
  (i)
    
    IAS 24:
 Amendments to IAS 24, Related Party Disclosures:Effective for annual periods beginning on or after January 1, 2011 with earlier
adoption is permitted.There are limited differences in the definition of what constitutes a related party;
however, the amendment requires more detailed disclosures regarding commitments.
 (ii)
    
    IFRS 8:
 IFRS 8, Operating Segments:Effective for annual periods beginning on or after January 1, 2010.
Requires purchase information about segment assets.
 (iii)
    
    IFRS 9:
 New standard IFRS 9, Financial Instruments:Effective for annual periods beginning on or after January 1, 2013 with earlier
adoption permitted.As part of the project to replace IAS 39, Financial Instruments: Recognition and
Measurement, this standard retains but simplifies the mixed measurement model and
establishes two primary measurement categories for financial assets. More specifically,
the standard:
 
    
    deals with classification and measurement of financial assets
    
    establishes two primary measurement categories for financial assets: amortized
cost and fair value
    
    classification depends on entitys business model and the contractual cash flow
characteristics of the financial asset
    
    eliminates the existing categories: held to maturity, available for sale, and loans
and receivables.
  Outstanding share data
  - 20 -




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Disclosure controls and procedures and internal control over financial reporting
   Internal Control Integrated
Framework
  Risks and uncertainties
  - 21 -




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Risks Related to the Commercialization of our Product and Product Candidates
 Our commercial success depends largely on the commercialization of EGRIFTA TM ; the
failure of EGRIFTA TM to obtain commercial acceptance would have a material adverse
effect on us.
 EGRIFTA TM EGRIFTA TM EGRIFTA TM
 EGRIFTA TM
 
    
    receipt of regulatory approvals for EGRIFTATM from regulatory agencies in the
territories other than the United States in which we wish to expand the
commercialization of tesamorelin;
    
    market acceptance of EGRIFTATM by the medical community, patients and third-
party payors (such as governmental health administration authorities and private
health coverage insurers);
    
    the amount of resources devoted by our commercial partners to commercialize
EGRIFTATM in their respective territories;
    
    maintaining manufacturing and supply agreements to ensure the availability of
commercial quantities of EGRIFTATM through validated processes;
    
    the number of competitors in our market; and
    
    protecting and enforcing our intellectual property and avoiding patent infringement claims.
 EGRIFTA TM
 - 22 -




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We are or will be dependent on a limited number of collaboration and licensing agreements for the
commercialization of EGRIFTA TM in the United States, Europe, Latin America, Africa and
the Middle East. These agreements place the commercialization of EGRIFTA TM in these
markets outside of our control.
 EGRIFTA TM EGRIFTA TM
 
    
    our limited control of the amount and timing of resources that our commercial
partners will be devoting to the commercialization, marketing and distribution of
tesamorelin, including obtaining patient reimbursement for EGRIFTATM, which
could adversely affect our ability to obtain or maximize our royalty payments;
    
    disputes or litigation that may arise between us and our commercial partners,
which could adversely affect the commercialization of tesamorelin, all of which
would divert our managements attention and our resources;
    
    our commercial partners not properly defending our intellectual property rights or
using them in such a way as to expose us to potential litigation, which could, in
both cases, adversely affect the value of our intellectual property rights; and
    
    corporate reorganizations or changes in business strategies of our commercial
partners, which could adversely affect a commercial partners willingness or
ability to fulfill its obligations under its respective agreement.
 EGRIFTA TM EGRIFTA TM EGRIFTA TM EGRIFTA TM
 EGRIFTA TM
 We rely on third parties for the manufacture and supply of EGRIFTA TM and tesamorelin and
such reliance may adversely affect us if the third parties are unable or unwilling to fulfill their
obligations.
  - 23 -




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EGRIFTA TM
 EGRIFTA TM
 
    
    becomes unavailable to us for any reason, including as a result of the failure to comply with
good manufacturing practices, or GMP, regulations;
    
    experiences manufacturing problems or other operational failures, such as equipment failures
or unplanned facility shutdowns required to comply with GMP or damage from any event, including
fire, flood, earthquake, business restructuring or insolvency; or
    
    fails to perform its contractual obligations under our agreement, such as failing to deliver
the quantities requested on a timely basis.
 EGRIFTA TM EGRIFTA TM EGRIFTA TM EGRIFTA TM
 Even though we have received regulatory approval for EGRIFTA TM in the United States, we
still may not be able to successfully commercialize it if we do not gain market acceptance and the
revenue that we generate from its sales, if any, may be limited.
 EGRIFTA TM
 - 24 -




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
    
    acceptance of the product by physicians and patients as safe and effective
treatments and addressing a significant unmet medical need;
    
    product price;
    
    the effectiveness of our sales and marketing efforts (or those of our commercial
partners);
    
    storage requirements and ease of administration;
    
    dosing regimen;
    
    safety and efficacy;
    
    prevalence and severity of side effects;
    
    competitive products;
    
    the ability to obtain and maintain sufficient third-party coverage or reimbursement
from government health care programs, including Medicare and Medicaid, private
health insurers and other third-party payors; and
    
    the willingness and ability of patients to pay out-of-pocket in the absence of third-
party coverage.
 EGRIFTA TM
 We have no internal sales, marketing or distribution capabilities so we must rely on strategic
alliance agreements with third parties for the sale and marketing of EGRIFTA TM or any
future products.
 EGRIFTA TM EGRIFTA TM
 EGRIFTA TM
 - 25 -




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We are substantially dependent on revenues from EGRIFTA TM .
 EGRIFTA TM EGRIFTA TM
 Our levels of revenues are highly dependent on obtaining patient reimbursement for
EGRIFTA TM .
 EGRIFTA TM
 EGRIFTA TM
 EGRIFTA TM EGRIFTA TM EGRIFTA TM
 A variety of risks associated with our international business relationships could materially
adversely affect our business.
  
    
    differing regulatory requirements for drug approvals in foreign countries;
    
    potentially reduced protection for intellectual property rights;
    
    potential third-party patent rights in foreign countries;
 - 26 -




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
    
    the potential for so-called parallel importing, which is what happens when a local
seller, faced with high or higher local prices, opts to import goods from a foreign
market, with low or lower prices, rather than buying them locally;
    
    unexpected changes in tariffs, trade barriers and regulatory requirements;
    
    economic weakness, including inflation, or political instability, particularly in
foreign economies and markets;
    
    compliance with tax, employment, immigration and labor laws for employees
traveling abroad;
    
    foreign taxes;
    
    foreign exchange contracts and foreign currency fluctuations, which could result
in increased operating expenses and reduced revenue, and other obligations
incident to doing business in another country;
    
    workforce uncertainty in countries where labor unrest is more common than in the
United States and Canada;
    
    production shortages resulting from any events affecting raw material supply or
manufacturing capabilities abroad; and
    
    business interruptions resulting from geo-political actions, including war and
terrorism, or natural disasters, including earthquakes, volcanoes, typhoons,
floods, hurricanes and fires.
  Governments outside the United States tend to impose strict price controls, which may adversely
affect our revenues, if any.
 EGRIFTA TM
 We face competition and the development of new products by other companies could materially
adversely affect our business and products.
  - 27 -




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If we fail to comply with government regulations regarding the import and export of products and
raw materials, we could be subject to fines, sanctions and penalties that could adversely affect
our ability to operate our business.
  Risks Related to the Regulatory Review Process
 Even after regulatory approval has been obtained regulatory agencies may impose limitations on the
indicated uses for which our products may be marketed, subsequently withdraw approval or take other
actions against us that would be adverse to our business.
 EGRIFTA TM EGRIFTA TM EGRIFTA TM EGRIFTA TM EGRIFTA TM
 - 28 -




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EGRIFTA TM
 EGRIFTA TM
 
    
    restrictions on the use of the product, manufacturers or manufacturing processes;
    
    warning letters;
    
    civil or criminal penalties;
    
    fines;
    
    injunctions;
    
    product seizures or detentions;
    
    import or export bans or restrictions;
    
    product recalls and related publicity requirements;
    
    suspension or withdrawal of regulatory approvals;
    
    total or partial suspension of production; and
    
    refusal to approve pending applications for marketing approval of new product
candidates or supplements to approved applications.
  To date, we do not have the required regulatory approvals to commercialize EGRIFTA TM outside of the United States and cannot guarantee that we will obtain such regulatory approvals or
that any of our product candidates will be approved for commercialization in any country, including
the United States.
 EGRIFTA TM
 EGRIFTA TM EGRIFTA TM
 - 29 -




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EGRIFTA TM
  We have only obtained FDA approval for EGRIFTA TM and we must complete several
preclinical studies and clinical trials for our other product candidates which may not yield
positive results and, consequently, could prevent us from obtaining regulatory approval.
  Recently enacted and future legislation may increase the difficulty and cost for us to obtain
marketing approval of and commercialize our product candidates and affect the prices we may obtain.
  - 30 -




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EGRIFTA TM
  EGRIFTA TM
  Risks Related to Our Intellectual Property
 Our failure to protect our intellectual property may have a material adverse effect on our ability
to develop and commercialize our products.
  - 31 -




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- 32 -




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##### 



Our commercial success depends, in part, on our ability not to infringe on third party patents and
other intellectual property rights.
     - 33 -




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##### 



Other Risks Related to Our Business
 We have a history of net losses and we may never achieve high profitability.
  EGRIFTA TM EGRIFTA TM
 We rely on third-party service providers to conduct our preclinical studies and clinical trials and
the failure by any of these third parties to comply with their obligations may delay the studies
which could have an adverse effect on our development programs.
  - 34 -




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The conduct of clinical trials requires the enrolment of patients and difficulties in enrolling
patients could delay the conduct of our clinical trials or result in their non-completion.
  We may require additional funding and may not be able to raise the capital necessary to fund all or
part of our capital requirements, including to continue and complete the research and development
of our product candidates and their commercialization.
  - 35 -




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##### 



If product liability lawsuits are brought against us, they could result in costly and
time-consuming litigation and significant liabilities.
 EGRIFTA TM
  The development and commercialization of our drugs could expose us to liability claims which could
exceed our insurance coverage.
  We depend on our key personnel to research, develop and bring new products to the market and
the loss of key personnel or the inability to attract highly qualified individuals could have a
material adverse effect on our business and growth potential.
 - 36 -




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##### 



We may be unable to identify and complete in-licensing or acquisitions. In-licensing or
acquisitions could divert managements attention and financial resources, may negatively affect our
operating results and could cause significant dilution to our shareholders.
  
    
    diversion of managements attention;
    
    disruption to our ongoing business;
    
    failure to retain key acquired personnel;
    
    difficulties in integrating acquired operations, technologies, products or personnel;
    
    unanticipated expenses, events or circumstances;
    
    assumption of disclosed and undisclosed liabilities;
    
    inappropriate valuation of the acquired in-process research and development, or
the entire acquired business; and
    
    difficulties in maintaining customer relations.
  We may not achieve our publicly announced milestones on time.
  - 37 -




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##### 



The outcome of scientific research is uncertain and our failure to discover new compounds could
slow down the growth of our portfolio of products.
  Risks Related to our Common Shares
 Our share price has been volatile, and an investment in our common shares could suffer a decline in
value.
   Our quarterly operating results may fluctuate significantly.
  
    
    variations in the level of revenues and royalties received related to our
development programs;
    
    variations in the level of expenses related to our development programs;
    
    addition or termination of clinical trials;
 - 38 -




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
    
    any intellectual property infringement lawsuit in which we may become involved;
    
    regulatory developments affecting our product candidates;
    
    our execution of any collaborative, licensing or similar arrangements, and the
timing of payments we may make or receive under these arrangements; and
    
    the achievement and timing of milestone payments under our existing strategic
partnership agreements.
  We do not intend to pay dividends on our common shares and, consequently, your ability to achieve a
return on your investment will depend on appreciation in the price of our common shares.
  Our revenues and expenses may fluctuate significantly and any failure to meet financial
expectations may disappoint securities analysts or investors and result in a decline in the price
of our common shares.
  
    
    the inability to complete product development in a timely manner that results in a
failure or delay in receiving the required regulatory approvals or allowances to
commercialize product candidates;
    
    the timing of regulatory submissions and approvals;
    
    the timing and willingness of any current or future collaborators to invest the
resources necessary to commercialize the product candidates;
    
    the outcome of any litigation;
    
    changes in foreign currency fluctuations;
    
    the timing of achievement and the receipt of milestone payments from current or
future third parties;
 - 39 -




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
    
    failure to enter into new or the expiration or termination of current agreements
with third parties; and
    
    failure to introduce the product candidates to the market in a manner that
generates anticipated revenues.
 We may be adversely affected by currency fluctuations.
  Our articles and certain Canadian laws could delay or deter a change of control.
    Further information on Theratechnologies
 www.sedar.com
 - 40 -