Exhibit 99.10
 
 THERATECHNOLOGIES INC.




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##### 



THERATECHNOLOGIES INC.
  Financial StatementsConsolidated Statement of Financial Position
    
    
    1Consolidated Statement of Comprehensive Income
    
    
    2Consolidated Statement of Changes in Equity
    
    
    3Consolidated Statement of Cash Flows
    
    
    5Notes to the Consolidated Financial Statements
    
    
    6




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##### 



THERATECHNOLOGIES INC.
 
 February 28,
    
    
    November 30,Note
    
    
    2011
    
    
    2010$
    
    
    $AssetsCurrent assets:Cash
    
    
    
    
    
    
    532
    
    
    
    26,649Bonds
    
    
    
    
    
    
    9,605
    
    
    
    1,860Trade and other receivables
    
    
    6
    
    
    
    1,393
    
    
    
    161Tax credits and grants receivable
    
    
    
    
    
    
    485
    
    
    
    332Inventories
    
    
    7
    
    
    
    4,614
    
    
    
    4,317Prepaid expenses
    
    
    
    
    
    
    909
    
    
    
    1,231Derivative financial assets
    
    
    9 a
    )
    
    
    721
    
    
    
    Total current assets
    
    
    
    
    
    
    18,259
    
    
    
    34,550Non-current assets:Bonds
    
    
    
    
    
    
    45,705
    
    
    
    36,041Property and equipment
    
    
    
    
    
    
    1,012
    
    
    
    1,060Total non-current assets
    
    
    
    
    
    
    46,717
    
    
    
    37,101Total assets
    
    
    
    
    
    
    64,976
    
    
    
    71,651LiabilitiesCurrent liabilities:Accounts payable and accrued liabilities
    
    
    
    
    
    
    5,026
    
    
    
    4,977Current portion of deferred revenue
    
    
    5
    
    
    
    6,846
    
    
    
    6,847Total current liabilities
    
    
    
    
    
    
    11,872
    
    
    
    11,824Non-current liabilities:Other liabilities
    
    
    8
    
    
    
    1,153
    
    
    
    325Deferred revenue
    
    
    5
    
    
    
    5,135
    
    
    
    6,846Total non-current liabilities
    
    
    
    
    
    
    6,288
    
    
    
    7,171Total liabilities
    
    
    
    
    
    
    18,160
    
    
    
    18,995EquityShare capital
    
    
    
    
    
    
    279,407
    
    
    
    279,398Contributed surplus
    
    
    
    
    
    
    8,231
    
    
    
    7,808Deficit
    
    
    
    
    
    
    (241,048
    )
    
    
    (235,116
    )Accumulated other comprehensive income
    
    
    
    
    
    
    226
    
    
    
    566Total equity
    
    
    
    
    
    
    46,816
    
    
    
    52,656Contingent liability
    
    
    11Subsequent events
    
    
    12Total liabilities and equity
    
    
    
    
    
    
    64,976
    
    
    
    71,651
  1




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##### 



THERATECHNOLOGIES INC.
 
 Note
    
    
    2011
    
    
    2010$
    
    
    $(Restated -note 2 (a))Revenue:Sale of goods
    
    
    
    
    
    
    1,798
    
    
    
    Research services:Upfront payments and initial technology access fees
    
    
    5
    
    
    
    1,711
    
    
    
    1,711Royalties and license fees
    
    
    
    
    
    
    9
    
    
    
    6Total revenue
    
    
    
    
    
    
    3,518
    
    
    
    1,717Cost of sales
    
    
    
    
    
    
    2,595
    
    
    
    Research and development expenses, net of tax credits of $153 (2010 - $168)
    
    
    
    
    
    
    2,993
    
    
    
    4,123Selling and market development expenses
    
    
    
    
    
    
    477
    
    
    
    620General and administrative expenses
    
    
    
    
    
    
    3,215
    
    
    
    1,745Total operating expenses
    
    
    
    
    
    
    9,280
    
    
    
    6,488Results from operating activities
    
    
    
    
    
    
    (5,762
    )
    
    
    (4,771
    )Finance income
    
    
    
    
    
    
    372
    
    
    
    578Finance costs
    
    
    
    
    
    
    (577
    )
    
    
    (48
    )Total (finance costs) net finance income
    
    
    
    
    
    
    (205
    )
    
    
    530Net loss before income taxes
    
    
    
    
    
    
    (5,967
    )
    
    
    (4,241
    )Tax recovery
    
    
    
    
    
    
    35
    
    
    
    Net loss
    
    
    
    
    
    
    (5,932
    )
    
    
    (4,241
    )Other comprehensive loss, net of tax:Net change in fair value available-for-sale financial assets, net of tax
    
    
    
    
    
    
    (324
    )
    
    
    3Net change in fair value available-for-sale financial assets transferred to net loss, net of tax
    
    
    
    
    
    
    (16
    )
    
    
    (100
    )(340
    )
    
    
    (97
    )Total comprehensive loss for the period
    
    
    
    
    
    
    (6,272
    )
    
    
    (4,338
    )Basic and diluted loss per share
    
    
    9
    (c)
    
    
    (0.10
    )
    
    
    (0.07
    )
  2




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##### 



THERATECHNOLOGIES INC.
 
 Unrealized gainsor losses onavailable-for-saleShare capital
    
    
    Contributed
    
    
    financialNote
    
    
    Number
    
    
    Dollars
    
    
    surplus
    
    
    assets (i)
    
    
    Deficit
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance as at November 30, 2010
    
    
    
    
    
    
    60,512,764
    
    
    
    279,398
    
    
    
    7,808
    
    
    
    566
    
    
    
    (235,116
    )
    
    
    52,656Total comprehensive loss for the period:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,932
    )
    
    
    (5,932
    )Other comprehensive loss:Net change in fair value of available-for-sale financial assets, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (324
    )
    
    
    
    
    
    
    (324
    )Net change in fair value of available-for-sale financial assets transferred to net loss,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    (16
    )Total comprehensive loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (340
    )
    
    
    (5,932
    )
    
    
    (6,272
    )Transactions with owners, recorded directly in equity:Share-based compensation plan:Share-based compensation for stock option plan
    
    
    9
    (b)
    
    
    
    
    
    
    
    
    
    
    427
    
    
    
    
    
    
    
    
    
    
    
    427Exercise of stock options:Monetary consideration
    
    
    9
    (b)
    
    
    3,000
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Attributed value
    
    
    9
    (b)
    
    
    
    
    
    
    4
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    Total contributions by owners
    
    
    
    
    
    
    3,000
    
    
    
    9
    
    
    
    423
    
    
    
    
    
    
    
    
    
    
    
    432Balance as at February 28, 2011
    
    
    
    
    
    
    60,515,764
    
    
    
    279,407
    
    
    
    8,231
    
    
    
    226
    
    
    
    (241,048
    )
    
    
    46,816
 
 (i)
    
    Accumulated other comprehensive income.  3




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##### 



THERATECHNOLOGIES INC.
 
 Unrealized gainsor losses onavailable-for-saleShare capital
    
    
    Contributed
    
    
    financialNote
     
     
    Number
     
     
    Dollars
     
     
    surplus
     
     
    assets (i)
     
     
    Deficit
     
     
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $(Restated -note 2 (a))Balance as at November 30, 2009
    
    
    
    
    
    
    60,429,393
    
    
    
    279,169
    
    
    
    6,757
    
    
    
    1,282
    
    
    
    (244,160
    )
    
    
    43,048Total comprehensive loss for the period:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,241
    )
    
    
    (4,241
    )Other comprehensive loss:Net change in fair value of available-for-sale financial assets, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Net change in fair value of available-for-sale financial assets transferred to net loss,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    
    
    
    
    (100
    )Total comprehensive loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (97
    )
    
    
    (4,241
    )
    
    
    (4,338
    )Transactions with owners, recorded directly in equity:Share-based compensation plan:Share-based compensation for stock option plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    233Exercise of stock options:Monetary consideration
    
    
    
    
    
    
    21,164
    
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38Attributed value
    
    
    
    
    
    
    
    
    
    
    23
    
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    Total contributions by owners
    
    
    
    
    
    
    21,164
    
    
    
    61
    
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    271Balance as at February 28, 2010
    
    
    
    
    
    
    60,450,557
    
    
    
    279,230
    
    
    
    6,967
    
    
    
    1,185
    
    
    
    (248,401
    )
    
    
    38,981
 (i)
    
    Accumulated other comprehensive income.  4




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##### 



THERATECHNOLOGIES INC.
 
 Note
    
    
    2011
    
    
    2010$
    
    
    $(Restated -note 2 (a))Operating activities:Net loss
    
    
    
    
    
    
    (5,932
    )
    
    
    (4,241
    )Adjustments for:Depreciation of property and equipment
    
    
    
    
    
    
    67
    
    
    
    147Share-based compensation
    
    
    
    
    
    
    921
    
    
    
    233Write-down of inventories
    
    
    7
    
    
    
    375
    
    
    
    Lease inducements and amortization
    
    
    
    
    
    
    126
    
    
    
    Change in fair value of derivative financial assets
    
    
    9
    (a)
    
    
    116
    
    
    
    Change in fair value of liability related to the deferred stock unit plan
    
    
    9
    (a)
    
    
    (93
    )
    
    
    Tax recovery
    
    
    
    
    
    
    (35
    )
    
    
    Operating activities before changes in operating assets and liabilities
    
    
    
    
    
    
    (4,455
    )
    
    
    (3,861
    )Change in accrued interest income on bonds
    
    
    
    
    
    
    (234
    )
    
    
    163Change in trade and other receivables
    
    
    
    
    
    
    (1,232
    )
    
    
    94Change in tax credits and grants receivable
    
    
    
    
    
    
    (153
    )
    
    
    165Change in inventories
    
    
    
    
    
    
    (672
    )
    
    
    (26
    )Change in prepaid expenses
    
    
    
    
    
    
    322
    
    
    
    (395
    )Change in accounts payable and accrued liabilities
    
    
    
    
    
    
    372
    
    
    
    (2,113
    )Change in deferred revenue
    
    
    
    
    
    
    (1,712
    )
    
    
    (1,703
    )(3,309
    )
    
    
    (3,815
    )Cash flows used in operating activities
    
    
    
    
    
    
    (7,764
    )
    
    
    (7,676
    )Financing activities:Proceeds from exercise of stock options
    
    
    
    
    
    
    5
    
    
    
    38Cash flows from financing activities
    
    
    
    
    
    
    5
    
    
    
    38Investing activities:Acquisition of property and equipment
    
    
    
    
    
    
    (41
    )
    
    
    (175
    )Proceeds from sale of bonds
    
    
    
    
    
    
    8,579
    
    
    
    9,626Acquisition of bonds
    
    
    
    
    
    
    (26,059
    )
    
    
    Acquisition of derivative financial assets
    
    
    9
    (a)
    
    
    (837
    )
    
    
    Cash flows (used in) from investing activities
    
    
    
    
    
    
    (18,358
    )
    
    
    9,451Net change in cash
    
    
    
    
    
    
    (26,117
    )
    
    
    1,813Cash as at December 1
    
    
    
    
    
    
    26,649
    
    
    
    1,519Cash as at February 28
    
    
    
    
    
    
    532
    
    
    
    3,332
   5




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##### 



THERATECHNOLOGIES INC.
 
 1.
    
    Reporting entity:
 Theratechnologies Inc. is a specialty pharmaceutical company that discovers and develops
innovative therapeutic peptide products with an emphasis on growth hormone releasing factor
peptides. Its first product, EGRIFTA® (tesamorelin for injection), was approved by
the United States Food and Drug Administration (''FDA) in November 2010. To date,
EGRIFTA® is the only approved therapy for the reduction of excess abdominal fat in
HIV-infected patients with lipodystrophy.
 The consolidated financial statements include the accounts of Theratechnologies Inc. and its
wholly-owned subsidiaries (together referred to as the ''Company and individually as ''the
subsidiaries of the Company).
 Theratechnologies Inc. is governed by the Business Corporations Act(Québec) and is domiciled
in Québec, Canada. The Company is located at 2310 boul. Alfred-Nobel, Montréal, Québec, H4S
2B4.
 2.
    
    Basis of preparation:
 (a)
    
    Accounting framework:These unaudited consolidated interim financial statements (interim financial statements),
including comparative figures, have been prepared using accounting policies consistent with
International Financial Reporting Standards (IFRS) as prescribed by the International
Accounting Standards Board (IASB) and in accordance with International Accounting
Standard (IAS) 34  Interim Financial Reporting(IAS 34).Certain information, in particular the accompanying notes normally included in the annual
financial statements prepared in accordance with IFRS have been omitted or condensed. These
interim financial statements do not include all disclosures required under IFRS and
accordingly should be read in conjunction with the annual financial statements for the year
ended November 30, 2010 and the notes thereto. These interim financial statements have not
been reviewed by the Companys auditors.The interim financial statements of the Company for the three-month period ended February
28, 2010 were restated to reflect changes related to the Companys adoption of IFRS. In the
fourth quarter of 2010, the Company filed a request to adopt IFRS two years in advance of
the date required for canadian public companies. The request was approved by the Canadian
Securities authorities. The Company filed restated interim financial statements to comply
with this approval.
 6




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##### 



THERATECHNOLOGIES INC.
 
 2.
    
    Basis of preparation (continued):
 (b)
    
    Summary of accounting policies:The preparation of financial data is based on accounting principles and practices
consistent with those used in the preparation of the audited annual financial statements as
at November 30, 2010 except as noted below:Effective December 1, 2010, The Company adopted a new accounting standard, IFRS 8 Operating
Segments,that was issued by the IASB. IFRS 8 was revised and now requires disclosure of
information about segment assets. This accounting policy change was adopted on a
prospective basis with no restatement of prior period financial statements and had no
impact on the Companys operating segments disclosure.Other new or amended accounting standards also had no impact on the Companys accounting
methods.(c)
    
    Basis of measurement:The Companys consolidated financial statements have been prepared on a going concern and
historical cost basis, except for available-for-sale financial assets and derivative
financial assets which are measured at fair value.(d)
    
    Use of estimates and judgements:The preparation of the Companys interim financial statements in conformity with IFRSs
requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the
reporting period.Information about critical judgements in applying accounting policies that have the most
significant effect on the amounts recognized in the interim financial statements relate to
the timing of revenue recognition, the valuation of share-based compensation; the
realizability of deferred tax assets, and the recognition and measurement of contingent
liabilities.Other areas of judgement and uncertainty relate to the estimation of accruals for clinical
trial expenses, the recoverability of inventories, the measurement of the amount and
assessment of the recoverability of tax credits and grants receivable and the
capitalization of development expenditures.Reported amounts and note disclosure reflect the overall economic conditions that are most
likely to occur and anticipated measures management intends to take. Actual results could
differ from those estimates.
 
 7




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##### 



THERATECHNOLOGIES INC.
 
 2.
    
    Basis of preparation (continued):
 (d)
    
    Use of estimates and judgements (continued):The above estimates and assumptions are reviewed regularly. All revisions to accounting
estimates are recognized in the period in which the estimates are revised and in any future
periods affected.(e)
    
    Functional and presentation currency:These interim consolidated financial statements are presented in Canadian dollars, which is
the Companys functional currency. All financial information presented in Canadian dollars
has been rounded to the nearest thousand.
 3.
    
    Significant accounting policies:
 Derivative financial instrumentsDerivative financial instruments are recorded as either assets or liabilities measured at their
fair value unless exempted from derivative treatment as a normal purchase and sale. Certain
derivatives embedded in other contracts must also be measured at fair value. The changes in the
fair value of derivatives are recognized in the statement of comprehensive income.
 4.
    
    Upcoming changes in accounting policies:
 (a)
    
    Amendments to existing standards:Annual improvements to IFRS:The IASBs improvements to IFRS contain seven amendments that result in accounting changes
for presentation, recognition or measurement purposes. The most significant features of the
IASBs annual improvements project published in May 2010 which are applicable for annual
period beginning on or after January 1, 2011 with partial adoption permitted are included
under the specific revisions to standards discussed below.
 (i)
    
    IFRS 7:Amendment to IFRS 7, Financial Instruments: Disclosures:Multiple clarifications related to the disclosure of financial instruments and in
particular in regards to transfers of financial assets.
 
 8




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##### 



THERATECHNOLOGIES INC.
 
 4.
    
    Upcoming changes in accounting policies (continued):
 (a)
    
    Amendments to existing standards (continued):Annual improvements to IFRS(continued):
 (ii)
    
    IAS 1:Amendment to IAS 1, Presentation of Financial Statements: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.(iii)
    
    IAS 27:Amendment to IAS 27, Consolidated and Separate Financial Statements: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.(iv)
    
    IAS 34:Amendment to IAS 34, Interim Financial Reporting:The amendments place greater emphasis on the disclosure principles for interim
financial reporting involving significant events and transactions, including changes to
fair value measurements and the need to update relevant information from the most
recent annual report.
 In addition, the following new or revised standards and interpretations have been issued
but are not yet applicable to the Company:
 (i)
    
    IFRS 9 Financial instruments:Effective for annual periods beginning on or after January 1, 2013, with earlier
adoption permitted.
 9




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##### 



THERATECHNOLOGIES INC.
 
 4.
    
    Upcoming changes in accounting policies (continued):
 (a)
    
    Amendments to existing standards (continued):Annual improvements to IFRS(continued):
 (i)
    
    IFRS 9 Financial instruments (continued):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
    
    prescribes that 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.
 Certain changes were also made regarding the fair value option for financial
liabilities and accounting for certain derivatives linked to unquoted equity
instruments.
 5.
    
    Revenue and deferred revenue:
 a)
    
    EMD Serono Inc.On October 28, 2008, the Company entered into a collaboration and licensing agreement with
EMD Serono Inc. (EMD Serono), an affiliate of Merck KGaA, of Darmstadt, Germany,
regarding the exclusive commercialization rights of EGRIFTA® in the United
States for the treatment of excess abdominal fat in HIV-infected patients with
lipodystrophy (the Initial Product).Under the terms of the agreement, the Company is responsible for the development of the
Initial Product up to obtaining marketing approval in the United States, which was obtained
on November 10, 2010. The Company is also responsible for production and for the
development of a new formulation of the initial product. EMD Serono is responsible for
conducting product commercialization activities.
 
 10




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##### 



THERATECHNOLOGIES INC.
 
 5.
    
    Revenue and deferred revenue (continued):
 a)
    
    EMD Serono Inc. (continued)At the closing of the agreement, on December 15, 2008, the Company received US$30,000
(CAD$36,951), which included an initial payment of US$22,000 (CAD$27,097) and US$8,000
(CAD$9,854) as a subscription for common shares in the Company by Merck KGaA at a price of
US$3.67 (CAD$4.52) per share. The Company may receive up to US$215,000, which amount
includes the initial payment of US$22,000, the equity investment of US$8,000, as well as
payments based on the achievement of certain development, regulatory and sales milestones.
The Company will also be entitled to receive increasing royalties on annual net sales of
EGRIFTA® in the United States, if applicable.The initial payment of $27,097 has been deferred and is being amortized on a straight-line
basis over the estimated period for developing a new formulation of the Initial Product.
This period may be modified in the future based on additional information that may be
received by the Company. For the three-month period ended February 28, 2011, an amount of
$1,711 (2010  $1,711) was recognized as revenue. As at February 28, 2011, the deferred
revenue related to this transaction amounted to $11,981 (November 30, 2010  $13,692).The Company may conduct research and development for additional indications. Under the
collaboration and licensing agreement, EMD Serono will have the option to commercialize
additional indications for tesamorelin in the United States. If it exercises this option,
EMD Serono will pay half of the development costs related to such additional indications.
In such cases, the Company will also have the right, subject to an agreement with EMD
Serono, to participate in the promotion of the additional indications.b)
    
    Sanofi-aventisOn December 6, 2010, the Company announced the signing of a distribution and licensing
agreement with Sanofi-aventis (Sanofi), covering the commercial rights for
EGRIFTA® in Latin America, Africa, and the Middle East for the treatment of
excess abdominal fat in HIV-infected patients with lipodystrophy.
 11




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##### 



THERATECHNOLOGIES INC.
 
 5.
    
    Revenue and deferred revenue (continued):
 b)
    
    Sanofi-aventis (continued)Under the terms of the agreement, the Company will sell EGRIFTA® to Sanofi at a
transfer price equal to the higher of a percentage of Sanofis net selling price and a
predetermined floor price. The Company has retained all future development rights to
EGRIFTA® and will be responsible for conducting research and development for
any additional clinical programs. Sanofi will be responsible for conducting all regulatory
activities for EGRIFTA® in the aforementioned territories, including
applications for approval in the different countries for the treatment of excess abdominal
fat in HIV-infected patients with lipodystrophy. The Company also granted Sanofi an option
to commercialize tesamorelin for other indications in the territories mentioned above. If
such option is not exercised, or is declined, by Sanofi, the Company may commercialize
tesamorelin for such indications on its own or with a third party.c)
    
    Ferrer Internacional S.A.On February 3, 2011, the Company entered into a distribution and licensing agreement with
Ferrer Internacional S.A. (''Ferrer) covering the commercial rights for
EGRIFTA® for the treatment of excess abdominal fat in HIV-infected patients
with lipodystrophy in Europe, Russia, South Korea, Taiwan, Thailand and certain central
Asian countries.Under the terms of the Agreement, the Company will sell EGRIFTA® to Ferrer at a
transfer price equal to the higher of a significant percentage of the Ferrers net selling
price and a predetermined floor price. The Company has retained all development rights to
EGRIFTA® for other indications and will be responsible for conducting research
and development for any additional programs. Ferrer will be responsible for conducting all
regulatory and commercialization activities in connection with EGRIFTA® for the
treatment of excess abdominal fat in HIV-infected patients with lipodystrophy in the
territories mentioned above. The Company will be responsible for the manufacture and supply
of EGRIFTA® to Ferrer. The Company has the option to co-promote
EGRIFTA® for the reduction of excess abdominal fat in HIV-infected patients
with lipodystrophy in the territories. Ferrer has the option to enter into a co-development
and commercialization agreement using tesamorelin relating to any such new indications. The
terms and conditions of such a co-development and commercialization agreement will be
negotiated based on any additional program chosen for development.
 12




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##### 



THERATECHNOLOGIES INC.
 
 6.
    
    Trade and other receivables:
 February 28,
    
    
    November 30,2011
    
    
    2010$
    
    
    $Trade receivables
    
    
    1,342
    
    
    
    6Sales tax receivable
    
    
    28
    
    
    
    100Loans granted to employees under the share purchase plan
    
    
    14
    
    
    
    25Loans granted to related parties under the share purchase plan
    
    
    
    
    
    
    22Other receivables
    
    
    9
    
    
    
    81,393
    
    
    
    161
 7.
    
    Inventories:
 As at February 28, 2011, $109 of raw materials, $132 of work in progress and $134 of finished
products were written down to their net realizable value (2010  nil). Consequently, a
write-down of $375 was recorded to cost of sales in 2011 (2010  nil).
 8.
    
    Other liabilities
 February 28,
    
    
    November 30,Note
    
    
    2011
    
    
    2010$
    
    
    $Deferred lease inducements
    
    
    
    
    
    
    451
    
    
    
    325Liability related to the deferred stock unit plan
    
    
    9 (a)
    
    
    
    702
    
    
    
    1,153
    
    
    
    325
 13




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##### 



THERATECHNOLOGIES INC.
 
 9.
    
    Share capital:
 (a)
    
    Deferred stock unit plan:On December 10, 2010, the Board of Directors adopted a deferred stock unit plan (the DSU
Plan) for the benefit of its directors and officers (the Beneficiaries). The goal of the
DSU Plan is to increase the Companys ability to attract and retain high-quality
individuals to act as directors or officers and better align their interests with those of
the shareholders of the Company in the creation of long-term value. Under the terms of the
DSU Plan, Beneficiaries who are directors are entitled to elect to receive all or part of
their annual retainer to act as directors in deferred stock units (DSU). In addition to
his annual retainer, the Chairman of the Board is also entitled to elect to receive all or
part of his annual retainer in DSU. Beneficiaries who act as officers are entitled to elect
to receive all or part of their annual bonus, if any, in DSU. The value of a DSU (the DSU
Value) is equal to the average closing price of the common shares on The Toronto Stock
Exchange on the date on which a Beneficiary determines that he desires to receive or redeem
DSU and during the four (4) previous trading days. Beneficiaries who act as directors must
elect to receive DSU before December 23 of a calendar year for the ensuing calendar year
whereas Beneficiaries who act as officers must make that election within 48 hours after
having been notified of their annual bonus. For the purposes of granting DSU, the DSU Value
for directors is determined as at December 31 of a calendar year and the DSU Value for
officers is determined on the second business day after they have been notified of their
annual bonus.DSU may only be redeemed when a Beneficiary ceases to act as a director or an officer of
the Company. Upon redemption, the Company must provide a Beneficiary with an amount in cash
equal to the DSU Value on the Redemption Date. Beneficiaries may not sell, transfer or
otherwise assign their DSU or any rights associated therewith other than by will or in
accordance with legislation regarding the vesting and partition of successions.The DSU are totally vested at the grant date. In the case of the DSU granted to officers
for annual bonuses, a DSU liability is recorded at the grant date in place of the liability
for the bonuses payments. In the case of the directors, the expense related to DSU and
their liabilities are recognized at the grant date. During the quarter $494 (2010 -
nil) was recorded as an expense and is included in general and administrative expenses. The
liability is adjusted periodically to reflect any change in market value of common shares.
During the three-month period ended February 28, 2011, a gain of $93 due to the change in
the fair value of the liability related to the DSU was recognized. As at February 28, 2011,
the Company has a total of 145 658 DSU outstanding (2010  nil) and a liability related to
the DSU of $702 (2010  nil) recognised in other non-current liabilities. There were no
stock units that were redeemed.
 14




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##### 



THERATECHNOLOGIES INC.
 
 9.
    
    Share capital (continued):
 (a)
    
    Deferred stock unit plan (continued):To protect against fluctuations in the value of the DSUs, the Company signed two futures
stock contracts in the first quarter of 2011. The Company paid $837 as advance payments on
the contracts, $580 for the first and $257 for the second, these amounts correspond to 146
875 common shares of the Company at a price of $5.69 and $5.72 respectively. The contracts
expire in December 2011. They were not designated as hedging instruments for accounting
purposes. Changes in fair value of these contracts are, therefore, included in gain (loss)
on financial instruments carried at fair value in the period in which they occur. During
the three-month period ended February 28, 2011, a loss of $116 related to the change in the
fair value of derivative financial assets was recognized. As at February 28, 2011, the fair
value of future stock contracts was $721 (2010  nil) and is recorded in derivative
financial assets.(b)
    
    Stock option plan:The risk-free interest rate is based on the implied yield on a Canadian Government
zero-coupon issue with a remaining term equal to the expected term of the option. The
volatility is based solely on historical volatility equal to the expected life of the
option. The life of the options is estimated considering the vesting period at the grant
date, the life of the option and the average length of time of similar grants have remained
outstanding in the past. The dividend yield was excluded from the calculation, since it is
the present policy of the Company to retain in all earnings to finance operations and
future growth.The following table summarizes the measurement date weighted average fair value of stock
options granted during the periods ended February 28, 2011 and 2010:
 WeightedaverageNumber of
    
    
    grant-dateoptions
    
    
    fair value$2011
    
    
    250,000
    
    
    
    4.082010
    
    
    265,000
    
    
    
    2.90
 15




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##### 



THERATECHNOLOGIES INC.
 
 9.
    
    Share capital (continued):
 (b)
    
    Stock option plan (continued):The Black-Scholes model used by the Company to calculate option values was developed to
estimate the fair value of freely tradable, fully transferable options without vesting
restrictions, which significantly differs from the Companys stock option awards. This
model also requires four highly subjective assumptions, including future stock price
volatility and average option life, which greatly affect the calculated values.Changes in outstanding options granted under the Companys stock option plan for the year
ended November 30, 2010 and the three-month period ended February 28, 2011 were as follows:
 Weightedaverageexercise priceOptions
    
    
    per option$Options at November 30, 2009
    
    
    2,665,800
    
    
    
    5.20Granted
    
    
    335,000
    
    
    
    4.03Expired
    
    
    (32,500
    )
    
    
    11.15Forfeited
    
    
    (38,671
    )
    
    
    3.61Exercised
    
    
    (80,491
    )
    
    
    1.66Options at November 30, 2010
    
    
    2,849,138
    
    
    
    5.12Granted
    
    
    250,000
    
    
    
    5.65Expired
    
    
    (18,000
    )
    
    
    15.30Forfeited
    
    
    (39,167
    )
    
    
    3.96Exercised
    
    
    (3,000
    )
    
    
    1.80Options at February 28, 2011
    
    
    3,038,971
    
    
    
    5.12
 16




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##### 



THERATECHNOLOGIES INC.
 
 9.
    
    Share capital (continued):
 (b)
    
    Stock option plan (continued):The fair value of the options granted was estimated at the grant date using the
Black-Scholes model and the following weighted average assumptions:
 February 28,
    
    
    February 28,2011
    
    
    2010Risk-free interest rate
    
    
    2.72
    %
    
    
    2.46
    %Volatility
    
    
    74.46
    %
    
    
    81
    %Average option life in years
    
    
    7.5
    
    
    
    7.5Dividend yield
    
    Nil
    
    
NilGrant-date share price
    
    $
    5.65
    
    
    $
    3.84Option exercise price
    
    $
    5.65
    
    
    $
    3.84
 (c)
    
    Earnings per share:The calculation of basic earnings per share at February 28, 2011 was based on the net loss
attributable to common shareholders of the Company of $5,932 (2010  $4,241), and a
weighted average number of common shares outstanding of 60,514,420 (2010  60,438,098). The
weighted average number of common shares is calculated as follows:
 February 28,
    
    
    February 28,2011
    
    
    2010Issued common shares at December 1
    
    
    60,512,764
    
    
    
    60,429,393Effect of share options exercised
    
    
    1,656
    
    
    
    8,705Weighted average number of common shares at February 28
    
    
    60,514,420
    
    
    
    60,438,098
 At February 28, 2011, 1,324,832 options (2010  1,157,166) were excluded from the
diluted weighted average number of common shares calculation as their effect would have
been anti-dilutive.
 17




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##### 



THERATECHNOLOGIES INC.
 
 10.
    
    Supplemental cash flow information:
 The Company entered into the following transactions which had no impact on the cash flows:
 February 28,
    
    
    February 28,2011
    
    
    2010$
    
    
    $Additions to property and equipment included in accounts payable and accrued liabilities
    
    
    43
    
    
    
    135DSU issue related to bonus included in accounts payable and accrued liabilities
    
    
    301
    
    
    
    
 In addition, interest received totaled $122 (2010  $641).
 11.
    
    Contingent liability:
 On July 26, 2010, the Company received a motion of authorization to institute a class action
lawsuit against the Company, a director and a former executive officer (the Motion). This
Motion was filed in the Superior Court of Quebec, district of Montreal. The applicant is
seeking to initiate a class action suit to represent the class of persons who were shareholders
at May 21, 2010 and who sold their common shares of the Company on May 25 or 26, 2010. This
applicant alleges that the Company did not comply with its continuous disclosure obligations as
a reporting issuer by failing to disclose certain alleged adverse effects relating to the
administration of EGRIFTA®. The Company is of the view that the allegations
contained in the Motion are entirely without merit and intends to take all appropriate actions
to vigorously defend its position.The Motion had not yet been heard by the Superior Court of Quebec.The Company has subscribed to insurance covering its potential liability and the potential
liability of its directors and officers in the performance of their duties for the Company
subject to a $200 deductible.
 18




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##### 



THERATECHNOLOGIES INC.
 
 12.
    
    Subsequent events:
 On March 8, 2011, the Board of Directors decided not to pursue our public offering in Canada
and the United States, the expected offering price was not acceptable. The Company had
previously announced its intention to proceed to an initial public offering in the United
States on February 22, 2011, with the filing of a preliminary short form base prospectus. The
decision to withdraw the offering does not affect the Companys strategy, because it intends to
pursue its business plan with existing financial resources. The costs associated with the
withdrawn public offering amount to approximately $2,000.Between March 1, 2011 and April 11, 2011, 284,168 options were exercised at a weighted exercise
average price of $1.92 per share for a cash consideration of 545 $.
 19