Exhibit 99.12

Amended Consolidated Financial Statements of
(Unaudited)

THERATECHNOLOGIES INC.

Nine-month periods ended August 31, 2010 and 2009

THERATECHNOLOGIES INC.
Amended Consolidated Financial Statements
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009

Amended Financial Statements

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

EXPLANATORY NOTE

These amended unaudited consolidated financial statements of Theratechnologies Inc. (the “Company”) for the nine-month periods ended August 31, 2010 and 2009 reflect the Company’s adoption of International Financial Reporting Standards (''IFRS’’), as issued by the International Accounting Standards Board (''IASB’’). In the fourth quarter of 2010, The Company filed a request to adopt IFRS two years in advance of the date required by the Accounting Standards Board. The request was approved by the regulatory authorities. The Company is filing these amended consolidated financial statements to comply with this approval.

The Company’s Audit Committee originally approved the unaudited consolidated financial statements for the nine-month periods ended August 31, 2010 and 2009 on October 12, 2010 and those financial statements were filed on October 12, 2010. Those financial statements were prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”). Except for the changes related to the Company’s adoption of IFRS, these amended unaudited consolidated financial statements do not reflect events occurring after October 12, 2010. These amended unaudited consolidated financial statements supersede the Company’s original filing and should be read in connection with the consolidated financial statements as at November 30, 2010 and 2009 prepared in accordance with IFRS.

THERATECHNOLOGIES INC.
Consolidated Statement of Financial Position
(Unaudited)

As at August 31, 2010, November 30, 2009 and December 1, 2008
(in thousands of Canadian dollars)

			August 31,			November 30,			December 1,
	Note		2010			2009			2008
			$			$			$
Assets
Current assets:
Cash				2,370			1,519			133
Bonds				1,694			10,036			10,955
Trade and other receivables				131			375			610
Tax credits and grants receivable				181			1,333			1,451
Inventories				4,585			2,225			—
Prepaid expenses				1,004			630			739
Total current assets				9,965			16,118			13,888
Non-current assets:
Bonds				39,355			51,807			35,249
Property and equipment				1,106			1,229			1,299
Other assets				—			—			2,776
Total non-current assets				40,461			53,036			39,324
Total assets				50,426			69,154			53,212
Liabilities
Current liabilities:
Accounts payable and accrued liabilities				3,490			5,568			6,865
Current portion of deferred revenue		4		6,849			6,847			—
Total current liabilities				10,339			12,415			6,865
Non-current liabilities:
Other liabilities				167			—			—
Deferred revenue		4		8,557			13,691			—
Total non-current liabilities				8,724			13,691			—
Total liabilities				19,063			26,106			6,865
Equity
Share capital		5		279,389			279,169			269,219
Contributed surplus				7,631			6,757			5,760
Deficit				(256,529	)		(244,160	)		(229,004	)
Accumulated other comprehensive income				872			1,282			372
Total equity				31,363			43,048			46,347
Subsequent events		7
Total liabilities and equity				50,426			69,154			53,212

See accompanying notes to unaudited consolidated financial statements.

1

THERATECHNOLOGIES INC.
Consolidated Statement of Comprehensive Income
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

			August 31,						August 31,
	Note		2010			2009			2010			2009
			(3 months)						(9 months)
			$			$			$			$
Revenue:
Research services:
Milestone payment		4		—			10,884			—			10,884
Upfront payments and initial technology access fees		4		1,711			1,711			5,134			4,848
Royalties and license fees				6			6			17			18
Total revenue				1,717			12,601			5,151			15,750
Cost of sales				120			—			120			—
Research and development expenses, net of tax credits of $448 (2009 - $294) for the three-month period and $783 (2009 - $1,384) for the nine-month period				2,591			5,523			10,892			16,598
Selling and market development expenses				524			498			1,909			5,793
General and administrative expenses				2,262			1,488			5,966			4,980
Total operating expenses				5,497			7,509			18,887			27,371
Results from operating activities				(3,780	)		5,092			(13,736	)		(11,621	)
Finance income				435			547			1,522			1,724
Finance costs				(12	)		140			(155	)		(605	)
Total net financial income				423			687			1,367			1,119
Net (loss) profit				(3,357	)		5,779			(12,369	)		(10,502	)
Other comprehensive loss, net of tax:
Net change in fair value available-for-sale financial assets, net of tax				586			342			(151	)		1,327
Net change in fair value available-for-sale financial assets transferred to net loss, net of tax				(65	)		(48	)		(259	)		(118	)
				521			294			(410	)		1,209
Total comprehensive (loss) income for the period				(2,836	)		6,073			(12,779	)		(9,293	)
Basic and diluted (loss) earnings per share		5		(0.06	)		0.10			(0.20	)		(0.17	)

See accompanying notes to unaudited consolidated financial statements.

2

THERATECHNOLOGIES INC.
Consolidated Statement of Changes in Equity
(Unaudited)

Nine-month period ended August 31, 2010
(in thousands of Canadian dollars)

											Unrealized gains
											or losses on
											available-for-sale
				Share capital				Contributed			financial
	Note			Number		Dollars		surplus			assets (i)			Deficit			Total
						$		$			$			$			$
Balance as at November 30, 2009					60,429,393		279,169		6,757			1,282			(244,160	)		43,048
Total comprehensive loss for the period:
Net loss					—		—		—			—			(12,369	)		(12,369	)
Other comprehensive loss:
Net change in fair value of available-for-sale financial assets, net of tax					—		—		—			(151	)		—			(151	)
Net change in fair value of available-for-sale financial assets transferred to net loss, net of tax					—		—		—			(259	)		—			(259	)
Total comprehensive loss for the period					—		—		—			(410	)		(12,369	)		(12,779	)
Transactions with owners, recorded directly in equity:
Issue of common shares					2,880		15		—			—			—			15
Share-based compensation for stock option plan		5	(c)		—		—		951			—			—			951
Exercise of stock option:
Monetary consideration		5	(c)		77,493		128		—			—			—			128
Attributed value		5	(c)		—		77		(77	)		—			—			—
Total contributions by owners					80,373		220		874			—			—			1,094
Balance as at August 31, 2010					60,509,766		279,389		7,631			872			(256,529	)		31,363

⁽ⁱ⁾ Accumulated other comprehensive income.

3

THERATECHNOLOGIES INC.
Consolidated Statement of Changes in Equity, Continued
(Unaudited)

Nine-month period ended August 31, 2009
(in thousands of Canadian dollars)

										Unrealized gains
										or losses on
										available-for-sale
				Share capital				Contributed		financial
	Note			Number		Dollars		surplus		assets (i)			Deficit			Total
						$		$		$			$			$
Balance as at November 30, 2008					58,215,090		269,219		5,760		372			(229,004	)		46,347
Total comprehensive loss for the period:
Net loss					—		—		—		—			(10,502	)		(10,502	)
Other comprehensive loss:
Net change in fair value of available-for-sale financial assets, net of tax					—		—		—		1,327			—			1,327
Net change in fair value of available-for-sale financial assets transferred to net loss, net of tax					—		—		—		(118	)		—			(118	)
Total comprehensive loss for the period					—		—		—		1,209			(10,502	)		(9,293	)
Transactions with owners, recorded directly in equity:
Issue of common shares		4			2,182,387		9,861		—		—			—			9,861
Share-based compensation plan:
Share-based compensation for stock option plan		5	(c)		—		—		847		—			—			847
Total contributions by owners					2,182,387		9,861		847		—			—			10,708
Balance as at August 31, 2009					60,397,477		279,080		6,607		1,581			(239,506	)		47,762

⁽ⁱ⁾ Accumulated other comprehensive income.

See accompanying notes to unaudited consolidated financial statements.

4

THERATECHNOLOGIES INC.
Consolidated Statement of Cash Flows
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars)

		August 31,						August 31,
	Note	2010			2009			2010			2009
		(3 months)						(9 months)
		$			$			$			$
Operating activities:
Net loss			(3,357	)		5,779			(12,369	)		(10,502	)
Adjustments for:
Depreciation of property and equipment			92			157			374			441
Share-based compensation			511			249			951			847
Lease inducements and amortization			125			—			167			—
Operating activities before changes in operating assets and liabilities			(2,629	)		6,185			(10,877	)		(9,214	)
Change in accrued interest income on bonds			317			74			696			(728	)
Change in trade and other receivables			45			57			244			391
Change in tax credits and grants receivable			1,487			(294	)		1,485			(1,050	)
Change in inventories			(89	)		—			(2,360	)		(1,594	)
Change in prepaid expenses			(30	)		(532	)		(375	)		(1,055	)
Change in other assets			—			2,129			—			2,776
Change in accounts payable and accrued liabilities			(3,214	)		(921	)		(2,282	)		(2,923	)
Change in deferred revenue			(1,714	)		(1,715	)		(5,132	)		22,252
			(3,198	)		(1,202	)		(7,724	)		18,069
Cash flows from operating activities			(5,827	)		4,983			(18,601	)		8,855
Financing activities:
Proceeds from issue of share capital			—			—			15			9,861
Proceeds from exercise of stock options			37			—			128			—
Share issue costs			—			—			—			(8	)
Cash flows from financing activities			37			—			143			9,853
Investing activities:
Acquisition of property and equipment			(43	)		(55	)		(379	)		(290	)
Proceeds from sale of bonds			4,706			3,963			19,688			13,805
Acquisition of bonds			—			—			—			(19,631	)
Cash flows from (used in) investing activities			4,663			3,908			19,309			(6,116	)
Net change in cash			(1,127	)		8,891			851			12,592
Cash as at December 1			3,497			3,834			1,519			133
Cash as at August 31			2,370			12,725			2,370			12,725

See note 6 for supplemental cash flow information.

See accompanying notes to unaudited consolidated financial statements.

5

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

1. Reporting entity:

Theratechnologies Inc. is a Canadian biopharmaceutical company that discovers and develops innovative therapeutic products, with an emphasis on peptides, for commercialization. The Company targets unmet medical needs in specialty markets where it can retain all or some of the commercial rights to its products. Its most advanced compound, tesamorelin, is an analogue of the human growth hormone releasing factor.

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 incorporated under Part 1A of the Québec Companies Act and is domiciled in Quebec, Canada. The Company is located at 2310 boul. Alfred-Nobel, Montreal, Quebec, H4S 2B4.

2. Basis of preparation:

(a)	Statement of compliance:
	These amended interim consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (''IFRSs’’) as issued by the International Accounting Standards Board (''IASB’’). The Company’s first IFRS financial statements were for the annual period ended November 30, 2010 and were prepared using December 1, 2008 as the date of transition. In preparing the accompanying amended interim financial statements, the Company applied IFRS 1, First-time Adoption of International Financial Reporting Standards as disclosed in note 8.
	These amended interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. However, they should not be read in conjunction with the notes to the Company’s audited consolidated financial statements for the year ended November 30, 2009 as those were prepared in accordance with Canadian GAAP. The Company’s interim consolidated financial statements as previously filed were also prepared in accordance with Canadian GAAP. Canadian GAAP differs in some areas from IFRS. In preparing these amended interim consolidated financial statements, management amended the accounting and valuation methods previously applied in the Canadian GAAP financial statements to comply with IFRS. The Company’s annual consolidated financial statements as at November 30, 2010 and 2009 and for the years then ended have been concurrently filed with these amended unaudited interim consolidated financial statements. The same accounting policies as described in note 3 of these amended interim consolidated financial statements were used. The comparative figures for 2009 were also restated to reflect these adjustments.

6

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

2. Basis of preparation (continued):

(a)	Statement of compliance (continued):
	Certain information and footnote disclosures which are considered material to the understanding of the Company’s amended interim consolidated financial statements and which are normally included in annual financial statements prepared in accordance with IFRS are presented in note 3 along with reconciliations and descriptions of the effect of the transition from Canadian GAAP to IFRS on equity, earnings and comprehensive income presented in note 8. These amended interim consolidated financial statements do not include all disclosures required under IFRS and accordingly should be read in connection with the aforementioned annual financial statements and the notes thereto. These amended interim consolidated financial statements have not been reviewed by the Company’s auditors.
	These amended unaudited interim consolidated financial statements were authorized for issue by the Audit Committee on February 8, 2011.
(b)	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 which are measured at fair value.
	The methods used to measure fair value are discussed in note 22 included in the Company’s annual financial statements dated February 8, 2011.
(c)	Functional and presentation currency:
	These amended 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.
(d)	Use of estimates and judgements:
	The preparation of the Company’s amended interim consolidated 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 and assumption and estimation uncertainties that have the most significant effect on the amounts recognized in the amended interim consolidated financial statements relate to the timing of revenue recognition, the valuation of share-based compensation; the realizability of deferred income tax assets, and the recognition and measurement of contingent liabilities.

7

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

2. Basis of preparation (continued):

(d)	Use of estimates and judgements (continued):
	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.
	The above estimates and assumptions are reviewed regularly. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

3.	Significant accounting policies:
	The accounting policies set out below have been applied consistently to all periods presented in these amended interim consolidated financial statements and in preparing the opening IFRS statement of financial position at December 1, 2008, the date of transition to IFRSs.
	The accounting policies have been applied consistently by the subsidiaries of the Company.

(a)	Basis of consolidation:
	The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Subsidiaries are entities controlled by the Company. Control is present where the Company has the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are exercisable currently are taken into consideration. The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Company.
	Reciprocal balances and transactions, revenues and expenses resulting from transactions between subsidiaries and with the Company are eliminated in preparing the consolidated financial statements.

8

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(b)	Foreign currency:
	Transactions in foreign currencies are translated to the respective functional currencies of the subsidiaries of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the end of the reporting period.
	Foreign currency differences arising on translation are recognized in net profit (loss), except for differences arising on the translation of available-for-sale equity instruments, which are recognized in other comprehensive income. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
(c)	Revenue recognition:
	Collaboration agreements that include multiple deliverables are considered to be multi-element arrangements. Under this type of arrangement, the identification of separate units of accounting is required and revenue is allocated among the separate units based on their relative fair values.
	Payments received under the collaboration agreement may include upfront payments, milestone payments, research services, royalties and license fees. Revenues for each unit of accounting are recorded as described below:

(i)	Sale of goods:
	Revenues from the sale of goods are recognized when the Company has transferred to the buyer the significant risks and rewards of ownership of the goods, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.
(ii)	Royalties and license fees:
	Royalties and license fees are recognized when conditions and events under the license agreement have occurred and collectibility is reasonably assured.

9

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(c) Revenue recognition (continued):

(iii)	Research services:
	Revenues from research contracts are recognized when services to be provided are rendered and all conditions under the terms of the underlying agreement are met.

(a)	Upfront payments and initial technology access fees:
	Upfront payments and initial technology access fees are deferred and recognized as revenue on a systematic basis over the period during which the related products or services are delivered and all obligations are performed.
(b)	Milestone payments:
	Revenues subject to the achievement of milestones are recognized only when the specified events have occurred and collectibility is reasonably assured.

(d)	Cost of sales:
	Cost of sales represents the cost of goods sold and includes the cost of raw materials, supplies, direct overhead charges, unallocated indirect costs related to production as well as write-down of inventories. Other direct costs such as manufacturing start-up costs between validation and the achievement of normal production are expensed as incurred.
(e)	Employee benefits:
	Salaries and short-term employee benefits:
	Salaries and short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term profit-sharing or cash bonus plans if the Company has a legal or constructive obligation to pay an amount as a result of past services rendered by an employee and the obligation can be estimated reliably.
	Post-employment benefits:
	Post-employment benefits include a defined contribution plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense when due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. The Company’s defined contribution plan comprises the registered retirement savings plan, the Quebec Pension Plan and unemployment insurance.

10

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(e)	Employee benefits (continued):
	Termination benefits:
	Termination benefits are recognized as an expense when the Company is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
(f)	Finance income and finance costs:
	Finance income comprises interest income on available-for-sale financial assets and gains (losses) on the disposal of available-for-sale financial assets. Interest income is recognized as it accrues in profit (loss), using the effective interest method.
	Finance costs are comprised of bank charges, impairment losses on financial assets recognized in profit (loss) and foreign currency gains and losses which are reported on a net basis.
(g)	Inventories:
	Inventories are presented at the lower of cost, determined using the first-in first-out method, or net realizable value. Inventory costs include the purchase price and other costs directly related to the acquisition of materials, and other costs incurred in bringing the inventories to their present location and condition. Inventory costs also include the costs directly related to the conversion of materials to finished goods, such as direct labour, and a systematic allocation of fixed and variable production overhead, including manufacturing depreciation expense. The allocation of fixed production overheads to the cost of inventories is based on the normal capacity of the production facilities. Normal capacity is the average production expected to be achieved over a number of periods under normal circumstances.
	Net realizable value is the estimated selling price in the Company’s ordinary course of business, less the estimated costs of completion and selling expenses.
(h)	Property and equipment:
	Recognition and measurement:
	Items of property and equipment are recognized at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset and the costs of dismantling and removing the item and restoring the site on which it is located, if any.

11

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(h)	Property and equipment (continued):
	Recognition and measurement (continued):
	When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment.
	Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from disposal with the carrying amount of property and equipment, and are recognized in net profit (loss).
	Subsequent costs:
	The cost of replacing a part of an item of property and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property and equipment are recognized in profit (loss) as incurred.
	Depreciation:
	The estimated useful lives and the methods of depreciation for the current and comparative periods are as follows:

Asset	Method	Rate/Period
Computer equipment	Declining balance		50	%
Laboratory equipment	Declining balance		20	%
	and straight-line	5 years
Office furniture and equipment	Declining balance		20	%
Leasehold improvements	Straight-line	Lower of term of lease
		or economic life

This most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Estimates for depreciation methods, useful lives and residual values are reviewed at each reporting period-end and adjusted, if appropriate.

12

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(i)	Intangible assets:
	Research and development:
	Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is expensed as incurred.
	Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. These criteria are usually met when a regulatory filing has been made in a major market and approval is considered highly probable. The expenditure capitalized includes the cost of materials, direct labour, and overhead costs that are directly attributable to preparing the asset for its intended use. Other development expenditures are expensed as incurred. Capitalized development expenditures are measured at cost less accumulated amortization and accumulated impairment losses.
	During the periods ended August 31, 2010 and 2009, November 30, 2009 and as at December 1, 2008, no development expenditures were capitalized.
(j)	Financial instruments:
	The Company’s financial instruments are classified into one of three categories: loans and receivables, available-for-sale financial assets and other financial liabilities. Loans and receivables and other financial liabilities are measured at amortized cost.
	The Company has classified its bonds as available-for-sale financial assets. The Company has classified cash, and trade and other receivables as loans and receivables, and accounts payable and accrued liabilities as other financial liabilities.
	Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and that are not classified in any of the other categories. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented within equity. When an investment is derecognized, the cumulative gain or loss in other comprehensive income is transferred to profit (loss).

13

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(k)	Other assets:
	Other assets consist of prepaid expenses for research supplies that are not expected to be used within one year from the date of the consolidated statement of financial position.
	Research supplies are purchased in advance, in accordance with specific regulatory requirements, to be used in connection with the Company’s clinical trials.
(l)	Leases:
	Operating lease payments are recognized in net profit (loss) on a straight-line basis over the term of the lease.
	Lease inducements arising from leasehold improvements allowances and rent-free periods form an integral part of the total lease cost and are deferred and recognized in net profit (loss) over the term of the lease on a straight-line basis.
(m)	Impairment:
	Financial assets:
	A financial asset not carried at fair value through profit or loss is assessed at each consolidated financial statement reporting date to determine whether there is objective evidence that it is impaired. The Company considers that a financial asset is impaired if objective evidence indicates that one or more loss events had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
	An impairment test is performed, on an individual basis, for each material financial asset. Other individually non-material financial assets are tested as groups of financial assets with similar risk characteristics. Impairment losses are recognized in net profit (loss).
	An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in net profit (loss) and reflected in an allowance account against the respective financial asset. Interest on the impaired asset continues to be recognized through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through net profit (loss).

14

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(m)	Impairment (continued):
	Financial assets (continued):
	Impairment losses on available-for-sale investment securities are recognized by transferring the cumulative loss that has been recognized in other comprehensive income, and presented in unrealized gains/losses on available-for-sale financial assets in equity, to net profit (loss). The cumulative loss that is removed from other comprehensive income and recognized in net profit (loss) is the difference between the acquisition cost, net of any principal repayment and amortization, and the current fair value, less any impairment loss previously recognized in net profit (loss). Changes in impairment provisions attributable to time value are reflected as a separate component of interest income.
	If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognized in net profit (loss), then the impairment loss is reversed, with the amount of the reversal recognized in net profit (loss). However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in other comprehensive income.
	Non-financial assets:
	The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the recoverable amount is estimated.
	The recoverable amount of an asset or a cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of cash inflows from other assets or groups of assets (''cash-generating unit’’). Impairment losses recognized in prior periods are determined at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An asset’s carrying amount, increased through reversal of an impairment loss, must not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

15

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(n)	Provisions:
	A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are assessed by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount on provisions is recognized in finance costs.
	Onerous contracts:
	A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract. There were no onerous contracts as at August 31, 2010 and 2009, November 30, 2009 and December 1, 2008.
	Site restoration:
	Where there is a legal or constructive obligation to restore leased premises to good condition, except for normal aging on expiry or early termination of the lease, the resulting costs are provisioned up to the discounted value of estimated future costs and increase the carrying amount of the corresponding item of property and equipment. The Company amortizes the cost of restoring leased premises and recognizes an unwinding of discount expense on the liability related to the term of the lease.
	Contingent liability:
	A contingent liability is a possible obligation that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or a present obligation that arises from past events (and therefore exists), but is not recognized because it is not probable that a transfer or use of assets, provision of services or any other transfer of economic benefits will be required to settle the obligation, or the amount of the obligation cannot be estimated reliably.

16

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(o)	Income taxes:
	Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in net profit (loss), except to the extent that they relate to items recognized directly in other comprehensive income or in equity.
	Current tax:
	Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. The Company establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
	Deferred tax:
	Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
	A deferred tax liability is generally recognized for all taxable temporary differences.
	A deferred tax asset is recognized for unused tax losses and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(p)	Share-based compensation:
	The Company records share-based compensation related to employee stock options granted using the fair value-based method estimated using the Black-Scholes model. Under this method, compensation cost is measured at fair value at the date of grant and expensed, as employee benefits, over the period in which employees unconditionally become entitled to the award. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date.
	Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Company.

17

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(p)	Share-based compensation (continued):
	As permitted by IFRS 1, the Company elected not to restate options that were granted before November 7, 2002 and those granted after November 7, 2002 that were fully vested prior to the date of transition to IFRS.
(q)	Government grants:
	Government grants, consisting of grants and research investment tax credits, are recorded as a reduction of the related expense or cost of the asset acquired. Government grants are recognized when there is reasonable assurance that the Company has met the requirements of the approved grant program and there is reasonable assurance that the grant will be received.
(r)	Share capital:
	Common shares:
	Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects.
(s)	Earnings per share:
	The Company presents basic and diluted earnings per share (''EPS’’) data for its common             shares. Basic EPS is calculated by dividing the net profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own shares held, if applicable. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held, if applicable, for the effects of all dilutive potential common shares, which consist of the stock options granted to employees.
(t)	New standards and interpretations not yet applied:
	Certain pronouncements were issued by the IASB or International Financial Reporting Interpretations Committee that are mandatory for accounting periods beginning on or after January 1, 2010 or later periods. Many of these updates are not applicable or are inconsequential to the Company and have been excluded from the discussion below. The remaining pronouncements are being assessed to determine their impact on the Company’s results and financial position:

18

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(t)	New standards and interpretations not yet applied (continued):
	Annual improvements to IFRS:
	The IASB’s improvements to IFRS published in April 2009 contain fifteen amendments to twelve standards that result in accounting changes for presentation, recognition or measurement purposes largely for annual periods beginning on or after January 1, 2010, with early adoption permitted. These amendments were considered by the Company and deemed to be not applicable to the Company other than for the amendment to IAS 17 — Leases relating to leases which include both land and buildings elements. In this case, the Company early adopted this amendment.
	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 are included under the specific revisions to standards discussed below.

(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 unreplaced 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.

19

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(t)	New standards and interpretations not yet applied (continued):
	Annual improvements to IFRS (continued):

(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.

20

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(t)	New standards and interpretations not yet applied (continued):
	Annual improvements to IFRS (continued):

(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 fair value measurements and the need to update relevant information from the most recent annual report.

New or revised standards and interpretations:

In addition, the following new or revised standards and interpretations have been issued but are not yet applicable to the Company:

(i)	IFRS 8:
	IFRS 8, Operating Segments (revised):
	Effective for annual periods beginning on or after January 1, 2010.
	Requires purchase information about segment assets.
(ii)	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

21

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

3. Significant accounting policies (continued):

(t)	New standards and interpretations not yet applied (continued):
	New or revised standards and interpretations (continued):

(ii)	IFRS 9 (continued):
	New standard IFRS 9, Financial Instruments (continued):

– 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.

4.	Revenue and deferred revenue:
	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 tesamorelin in the United States for the treatment of excess abdominal fat in HIV-infected patients with lipodystrophy (the “Initial Product”). The Company retains all tesamorelin commercialization rights outside of the United States.
	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. The Company is also responsible for product production and for the development of a new formulation of the initial product. EMD Serono is responsible for conducting product commercialization activities.
	At the closing of the agreement, on December 15, 2008, the Company received US$30,000 (CAD$36,951), which includes 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 tesamorelin in the United States, if applicable.

22

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

4.	Revenue and deferred revenue (continued):
	The initial payment of $27,097 has been deferred and is being amortized over its estimated service 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 nine-month period ended August 31, 2010, an amount of $5,134 related to this transaction was recognized as revenue. As at August 31, 2010, the deferred revenues related to this transaction amounted to $15,403 (November 30, 2009 — $20,537).
	On August 12, 2009, the US Food and Drug Administration accepted the New Drug Application (“NDA”) made by the Company for tesamorelin. Under the terms of the Company’s Collaboration and Licensing Agreement with EMD Serono, the acceptance of the tesamorelin NDA resulted in a milestone payment of US$10,000 (CAD$10,884). This milestone payment has been recorded in the third quarter of 2009.
	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.

5.	Share capital:
	During the second quarter of 2010, the Company received subscriptions in the amount of $15 ($7 for the same period in 2009) for the issue of 2,880 common shares (2,550 for the same period in 2009) in connection with its share purchase plan.

(a)

Shareholder rights plan:

On February 10, 2010, the Board of Directors of the Company adopted a shareholder rights plan (the ''Plan’’), effective as of that date. The Plan is designed to provide adequate time for the Board of Directors and the shareholders, to assess an unsolicited takeover bid for the Company. In addition, the Plan provides the Board of Directors with sufficient time to explore and develop alternatives for maximizing shareholder value if a takeover bid is made, as well as provide shareholders with an equal opportunity to participate if a takeover bid is made, as well as provide shareholders with an equal opportunity to participate in a takeover bid to receive full and fair value for their common shares. The Plan will expire at the close of the Company’s annual meeting of shareholders in 2013.

23

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

5. Share capital (continued):

(a)	Shareholder rights plan (continued):
	The rights issued under the Plan will initially attach to and trade with the common shares and no separate certificates will be issued unless a triggering occurs. The rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20% or more of the outstanding shares without complying with the ''Permitted Bid’’ provisions of the Plan or without approval of the Board of Directors. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase common             shares at a 50% discount to the market price at the time.
	Under the Plan, a Permitted Bid is a bid made to all holders of the common shares and which is open for acceptance for no less than 60 days. If, at the end of 60 days, at least 50% of the outstanding common shares, other than those owned by the offeror and certain related parties, have been tendered, the offeror may take up and pay for the common shares, but must extend the bid for a further 10 days to allow other shareholders to tender.
(b)	Share purchase plan:
	The Share Purchase Plan entitles full-time and part-time employees of the Company who, on the participation date, are residents of Canada, are not under a probationary period and do not hold, directly or indirectly, five percent (5%) or more of the Company’s outstanding common shares, to directly subscribe for common shares of the Company. Under the Share Purchase Plan, a maximum of 550,000 common shares may be issued to employees.
	On May 1 and November 1 of each year (the ''Participation Dates’’), an employee may subscribe for a number of common shares under the Share Purchase Plan for an amount that does not exceed 10% of that employee’s gross annual salary for that year. Under the Share Purchase Plan, the Board of Directors has the authority to suspend or defer a subscription of common shares, or to decide that no subscription of common shares will be allowed on a Participation Date if it is in the Company’s best interest.
	The Share Purchase Plan provides that the number of common shares that may be issued to insiders, at any time, under all share-based compensation arrangements of the Company, cannot exceed 10% of the Company’s outstanding common shares, and the number of common shares issued to insiders, within any one-year period, under all security-based compensation arrangements, cannot exceed 10% of the outstanding common shares.

24

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

5. Share capital (continued):

(b)	Share purchase plan (continued):
	The subscription price for each new common share subscribed for under the Share Purchase Plan is equal to the weighted average closing price of the common shares on the Toronto Stock Exchange during a period of five days prior to the Participation Date. Employees may not assign the rights granted under the Share Purchase Plan.
	An employee may elect to pay the subscription price for common shares in cash or through an interest-free loan from the Company. Loans granted by the Company under the Share Purchase Plan are repayable through salary withholdings over a period not exceeding two years. All loans may be repaid prior to the scheduled repayment at any time. The loans granted to any employee may at no time exceed 10% of that employee’s current annual gross salary. All common shares purchased through an interest-free loan are hypothecated to secure full and final repayment of the loan and are held by a trustee until repayment in full. Loans are immediately due and payable on the occurrence of any of the following events: (i) termination of employment; (ii) sale or seizure of the hypothecated common shares; (iii) bankruptcy or insolvency of the employee; or (iv) suspension of the payment of an employee’s salary or revocation of the employee’s right to salary withholdings.
	At August 31, 2010, $72 (November 30, 2009 — $149; December 1, 2008 — $150) was receivable under these loans.
(c)	Stock option plan:
	The Company has established a stock option plan under which it can grant to its directors, officers, employees, researchers and consultants non-transferable options for the purchase of common shares. The exercise date of an option may not be later than 10 years after the grant date. A maximum number of 5,000,000 options can be granted under the plan. Generally, the options vest at the date of the grant or over a period up to 5 years. As at August 31, 2010, 970,171 options could still be granted by the Company (August 31 — 1,236,168).
	All options are to be settled by physical delivery of shares.

25

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

5. Share capital (continued):

(c)	Stock option plan (continued):
	Changes in outstanding options granted under the Company’s stock option plan for the year ended November 30, 2009 and the nine-month period ended August 31, 2010 were as follows:

				Weighted
				average
				exercise price
	Options			per option
				$
Options at December 1, 2008		2,161,800			6.52
Granted		680,500			1.83
Expired		(58,500	)		5.16
Forfeited		(118,000	)		9.92
Options at November 30, 2009		2,665,800			5.20
Granted		335,000			4.03
Expired		(25,000	)		9.91
Forfeited		(35,337	)		3.78
Exercised		(77,493	)		1.65
Options at August 31, 2010		2,862,970			5.14

The fair value of the options granted was estimated at the grant date using the Black-Scholes model and the following weighted average assumptions:

	2010			2009
Risk-free interest rate		2.46	%		1.79	%
Volatility		81	%		79	%
Average option life in years		7.5			7.5
Dividend yield	Nil			Nil
Grant-date share price	$	4.03		$	1.83
Option exercise price	$	4.03		$	1.83

26

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

5. Share capital (continued):

(c)	Stock option plan (continued):
	The risk-free interest rate is based on the implied yield on a Canadian Treasury 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 term of the option. The average life of the options is estimated considering the vesting period, the term of the option and the length of time that similar grants have remained outstanding in the past. Dividend yield was excluded from the calculation, since it is the present policy of the Company not to retain in cash in order to keep funds available to finance the Company’s growth.
	The following table summarizes the measurement date weighted average fair value of stock options granted during the periods ended August 31, 2010 and 2009:

			Weighted
			average
	Number of		grant-date
Periods ended August 31 (9 months)	options		fair value
			$
2010		335,000		3.05
2009		660,500		1.34

			Weighted
			average
	Number of		grant-date
Periods ended August 31 (3 months)	options		fair value
			$
2010		70,000		3.62
2009		—		—

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.

27

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

5. Share capital (continued):

(d)	Earnings per share:
	The calculation of basic earnings per share at August 31, 2010 was based on the net loss attributable to common shareholders of the Company of ($12,369) (2009 — ($10,502)), and a weighted average number of common shares outstanding of 60,469,621 (2009 — 60,284,591), calculated as follows:

	August 31,		August 31,
	2010		2009
Issued common shares at December 1		60,429,393		58,215,090
Effect of share options exercised		39,040		—
Effect of shares issued during the period		1,188		2,069,501
Weighted average number of common shares at August 31		60,469,621		60,284,591

The calculation of diluted earnings per share was based on a weighted average number of common shares calculated as follows:

	August 31,		August 31,
	2010		2009
Weighted average number of common shares (basic)		60,469,621		60,284,591
Effect of stock options on issue		—		165,420
Weighted average number of common shares (diluted) at August 31		60,469,621		60,450,011

At August 2010, 1,127,164 options (2009 — 1,385,833) were excluded from the diluted weighted average number of common shares calculation as their effect would have been anti-dilutive.

The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding.

28

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

6.	Supplemental information:
	The following transactions were conducted by the Company and did not impact cash flows:

	August 31,		August 31,		November 30,
	2010		2009		2009
	$		$		$
Additions to property and equipment included in accounts payable and accrued liabilities		55		28		183

7. Subsequent events:

(a)	Except for changes related to the Company’s adoption of IFRS, these amended unaudited interim consolidated financial statements do not reflect events occurring after October 12, 2010, the date of the filing of the consolidated financial statements prepared in accordance with Canadian GAAP. The annual audited consolidated financial statements of the Company prepared in accordance with IFRS have been filed concurrently with these amended unaudited interim consolidated financial statements. These amended unaudited interim consolidated financial statements should be read in connection with the annual financial statements for additional disclosures with respect to subsequent events.
(b)	On July 26, 2010, the Company received a motion of authorization to institute a class action against the Company and certain of its executive officers (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 a material change. The Company is of the view that the allegations contained in the Motion are frivolous and entirely without merit and intends to take all appropriate actions to vigorously defend its position.
	As of October 11, 2010, the Motion has not yet been heard by the Superior Court of Quebec.
	The Company subscribed insurances covering the responsibility of its administrators and officers in the exercise of their functions.

29

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8. Transition to IFRS:

As stated in note 2 (a), the Company has applied IFRS 1 and the accounting policies set out in note 3 in preparing the financial statements for the period ended August 31, 2010, the comparative period ended August 31, 2009, for the year ended November 30, 2009, and for the opening IFRS statement of financial position as at December 1, 2008 (the Company’s date of transition).

In preparing these consolidated financial statements in accordance with IFRS 1, the Company has applied the mandatory exceptions and certain of the optional exemptions from full retrospective application of IFRS.

The Company elected to apply the following optional exemptions from full retrospective application:

(i)	Share-based payment transaction exemption:
	The Company has elected to apply the share-based payment exemption. It applied IFRS 2 from December 1, 2008 to those stock options that were issued after November 7, 2002 but that had not vested by December 1, 2008. The application of the exemption is detailed below.
(ii)	Designation of financial assets and financial liabilities exemption:
	The Company elected to re-designate cash from the held for trading category to loans and receivables.

As required by IFRS 1, estimates made under IFRS at the date of transition must be consistent with estimates made for the same date under previous GAAP, unless there is evidence that those estimates were in error.

In preparing its opening IFRS consolidated statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Canadian GAAP.

An explanation of how the transition from previous Canadian GAAP to IFRS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and accompanying notes.

30

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8.	Transition to IFRS (continued):
	Reconciliation of equity as at December 1, 2008 and November 30, 2009:

										December 1, 2008												November 30, 2009
							IFRS				IFRS									IFRS			IFRS
				Canadian			adjust-				reclassi-						Canadian			adjust-			reclassi-
	Note			GAAP			ments				fications			IFRS			GAAP			ments			fications			IFRS
				$			$				$			$			$			$			$			$
Assets
Current assets:
Cash					133			—				—			133			1,519			—			—			1,519
Bonds					10,955			—				—			10,955			10,036			—			—			10,036
Trade and other receivables					610			—				—			610			375			—			—			375
Tax credits and grants receivable		(a	)		1,784			—				(333	)		1,451			1,666			—			(333	)		1,333
Inventories					—			—				—			—			2,225			—			—			2,225
Research supplies		(a	)		301			—				(301	)		—			287			—			(287	)		—
Prepaid expenses		(a	)		397			—				342			739			302			—			328			630
Total current assets					14,180			—				(292	)		13,888			16,410			—			(292	)		16,118
Non-current assets:
Bonds					35,249			—				—			35,249			51,807			—			—			51,807
Property and equipment					1,299			—				—			1,299			1,229			—			—			1,229
Other assets		(a	)		2,817			—				(41	)		2,776			41			—			(41	)		—
Total non-current assets					39,365			—				(41	)		39,324			53,077			—			(41	)		53,036
Total assets					53,545			—				(333	)		53,212			69,487			—			(333	)		69,154
Liabilities
Current liabilities:
Accounts payable and accrued liabilities		(a	)		7,198			—				(333	)		6,865			5,901			—			(333	)		5,568
Current portion of deferred revenue					—			—				—			—			6,847			—			—			6,847
Total current liabilities					7,198			—				(333	)		6,865			12,748			—			(333	)		12,415
Non-current liabilities:
Deferred revenue					—			—				—			—			13,691			—			—			13,691
Total non-current liabilities					—			—				—			—			13,691			—			—			13,691
Total liabilities					7,198			—				(333	)		6,865			26,439			—			(333	)		26,106
Equity
Share capital					269,219			—				—			269,219			279,169			—			—			279,169
Contributed surplus		(b	)		5,585			175				—			5,760			6,484			273			—			6,757
Deficit		(b	)		(228,829	)		(175	)			—			(229,004	)		(243,887	)		(273	)		—			(244,160	)
Accumulated other comprehensive income					372			—				—			372			1,282			—			—			1,282
Total equity					46,347			—				—			46,347			43,048			—			—			43,048
Total liabilities and equity					53,545			—				(333	)		53,212			69,487			—			(333	)		69,154

31

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8.	Transition to IFRS (continued):
	Reconciliation of equity as at August 31, 2010 and 2009:

										August 31, 2010												August 31, 2009
							IFRS				IFRS									IFRS			IFRS
				Canadian			adjust-				reclassi-						Canadian			adjust-			reclassi-
	Note			GAAP			ments				fications			IFRS			GAAP			ments			fications			IFRS
				$			$				$			$			$			$			$			$
Assets
Current assets:
Cash					2,370			—				—			2,370			12,725			—			—			12,725
Bonds					1,694			—				—			1,694			9,562			—			—			9,562
Trade and other receivables					131			—				—			131			220			—			—			220
Tax credits and grants receivable		(a	)		514			—				(333	)		181			3,167			—			(333	)		2,834
Inventories					4,585			—				—			4,585			1,594			—			—			1,594
Research supplies		(a	)		283			—				(283	)		—			1,029			—			(1,029	)		—
Prepaid expenses		(a	)		680			—				324			1,004			723			—			1,372			2,095
Total current assets					10,257			—				(292	)		9,965			29,020			—			10			29,030
Non-current assets:
Bonds					39,355			—				—			39,355			44,103			—			—			44,103
Property and equipment					1,106			—				—			1,106			1,128			—			—			1,128
Other assets		(a	)		41			—				(41	)		—			343			—			(343	)		—
Total non-current assets					40,502			—				(41	)		40,461			45,574			—			(343	)		45,231
Total assets					50,759			—				(333	)		50,426			74,594			—			(333	)		74,261
Liabilities
Current liabilities:
Accounts payable and accrued liabilities		(a	)		3,823			—				(333	)		3,490			4,580			—			(333	)		4,247
Current portion of deferred revenue					6,849			—				—			6,849			6,850			—			—			6,850
Total current liabilities					10,672			—				(333	)		10,339			11,430			—			(333	)		11,097
Non-current liabilities:
Other liabilities					167			—				—			167			—			—			—			—
Deferred revenue					8,557			—				—			8,557			15,402			—			—			15,402
Total non-current liabilities					8,724			—				—			8,724			15,402			—			—			15,402
Total liabilities					19,396			—				(333	)		19,063			26,832			—			(333	)		26,499
Equity
Share capital					279,389			—				—			279,389			279,080			—			—			279,080
Contributed surplus		(b	)		7,356			275				—			7,631			6,290			317			—			6,607
Deficit		(b	)		(256,254	)		(275	)			—			(256,529	)		(239,189	)		(317	)		—			(239,506	)
Accumulated other comprehensive income					872			—				—			872			1,581			—			—			1,581
Total equity					31,363			—				—			31,363			47,762			—			—			47,762
Total liabilities and equity					50,759			—				(333	)		50,426			74,594			—			(333	)		74,261

32

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8.	Transition to IFRS (continued):
	Reconciliation of comprehensive income for the year ended November 30, 2009:

							IFRS			IFRS
				Canadian			adjust-			reclassi-
	Note			GAAP			ments			fication			IFRS
				$			$			$			$
Revenue:
Research services:
Milestone payments		(c	)		—			—			10,884			10,884
Upfront payments and initial technology access fees		(c	)		—			—			6,560			6,560
Royalties and license fees		(c	)		17,468			—			(17,444	)		24
Interest		(c	)		2,252			—			(2,252	)		—
Total revenue					19,720			—			(2,252	)		17,468
Research and development expenses, net of tax credits		(b),	(c)		20,431			33			346			20,810
Selling and market development expenses		(b),	(c)		2,583			10			4,269			6,862
General and administrative expenses		(b),	(c)		7,149			55			(661	)		6,543
Patents		(c	)		346			—			(346	)		—
Fees associated with the collaboration and licensing agreement		(c	)		4,269			—			(4,269	)		—
Total operating expenses					34,778			98			(661	)		34,215
Results from operating activities					(15,058	)		(98	)		(1,591	)		(16,747	)
Finance income		(c	)		—			—			2,252			2,252
Finance costs		(c	)		—			—			(661	)		(661	)
Total net finance income					—			—			1,591			1,591
Net loss					(15,058	)		(98	)		—			(15,156	)
Other comprehensive income, net of tax:
Net change in fair value of available-for-sale financial assets, net of tax					1,039			—			—			1,039
Net change in fair value of available-for-sale financial assets transferred to net loss, net of tax					(129	)		—			—			(129	)
Other comprehensive income for the year					910			—			—			910
Total comprehensive income for the year					(14,148	)		(98	)		—			(14,246	)

33

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8.	Transition to IFRS (continued):
	Reconciliation of comprehensive income for the three-month periods ended August 31, 2010 and 2009:

										August 31, 2010												August 31, 2009
							IFRS				IFRS									IFRS			IFRS
				Canadian			adjust-				reclassi-						Canadian			adjust-			reclassi-
	Note			GAAP			ments				fications			IFRS			GAAP			ments			fications			IFRS
				$			$				$			$			$			$			$			$
Revenue:
Research services:
Milestone payments					—			—				—			—			—			—			10,884			10,884
Upfront payments and initial technology access fees		(c	)		—			—				1,711			1,711			—			—			1,711			1,711
Royalties and license fees		(c	)		1,717			—				(1,711	)		6			12,601			—			(12,595	)		6
Interest		(c	)		435			—				(435	)		—			547			—			(547	)		—
Total revenue					2,152			—				(435	)		1,717			13,148			—			(547	)		12,601
Cost of sales					120			—				—			120			—			—			—			—
Research and development expenses, net of tax credits		(b),(c	)		2,482			28				81			2,591			5,387			31			105			5,523
Selling and market development expenses		(b),(c	)		521			3				—			524			495			3			—			498
General and administrative expenses		(b),(c	)		2,225			49				(12	)		2,262			1,337			11			140			1,488
Patents		(c	)		81			—				(81	)		—			105			—			(105	)		—
Total operating expenses					5,429			80				(12	)		5,497			7,324			45			140			7,509
Results from operating activities					(3,277	)		(80	)			(423	)		(3,780	)		5,824			(45	)		(687	)		5,092
Finance income		(c	)		—			—				435			435			—			—			547			547
Finance costs		(c	)		—			—				(12	)		(12	)		—			—			140			140
Total net finance income					—			—				423			423			—			—			687			687
Net loss					(3,277	)		(80	)			—			(3,357	)		5,824			(45	)		—			5,779
Other comprehensive income, net of tax:
Net change in fair value of available-for-sale financial assets, net of tax					586			—				—			586			342			—			—			342
Net change in fair value of available-for-sale financial assets transferred to net loss, net of tax					(65	)		—				—			(65	)		(48	)		—			—			(48	)
Other comprehensive income for the period					521			—				—			521			294			—			—			294
Total comprehensive income for the period					(2,756	)		(80	)			—			(2,836	)		6,118			(45	)		—			6,073

34

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8.	Transition to IFRS (continued):
	Reconciliation of comprehensive income for the nine-month periods ended August 31, 2010 and 2009:

										August 31, 2010												August 31, 2009
							IFRS				IFRS									IFRS			IFRS
				Canadian			adjust-				reclassi-						Canadian			adjust-			reclassi-
	Note			GAAP			ments				fications			IFRS			GAAP			ments			fications			IFRS
				$			$				$			$			$			$			$			$
Revenue:
Research services:
Milestone payments					—			—				—			—			—			—			10,884			10,884
Upfront payments and initial technology access fees		(c	)		—			—				5,134			5,134			—			—			4,848			4,848
Royalties and license fees		(c	)		5,151			—				(5,134	)		17			15,750			—			(15,732	)		18
Interest		(c	)		1,522			—				(1,522	)		—			1,724			—			(1,724	)		—
Total revenue					6,673			—				(1,522	)		5,151			17,474			—			(1,724	)		15,750
Cost of sales					120			—				—			120			—			—			—			—
Research and development expenses, net of tax credits		(b),(c	)		10,515			(44	)			421			10,892			16,308			64			226			16,598
Selling and market development expenses		(b),(c	)		1,901			8				—			1,909			1,516			8			4,269			5,793
General and administrative expenses		(b),(c	)		6,083			38				(155	)		5,966			5,515			70			(605	)		4,980
Patents		(c	)		421			—				(421	)		—			226			—			(226	)		—
Other expenses		(c	)		—			—				—			—			4,269			—			(4,269	)		—
Total operating expenses					19,040			2				(155	)		18,887			27,834			142			(605	)		27,371
Results from operating activities					(12,367	)		(2	)			(1,367	)		(13,736	)		(10,360	)		(142	)		(1,120	)		(11,621	)
Finance income		(c	)		—			—				1,522			1,522			—			—			1,724			1,724
Finance costs		(c	)		—			—				(155	)		(155	)		—			—			(605	)		(605	)
Total net finance income					—			—				1,367			1,367			—			—			1,119			1,119
Net loss					(12,367	)		(2	)			—			(12,369	)		(10,360	)		(142	)		—			(10,502	)
Other comprehensive income, net of tax:
Net change in fair value of available-for-sale financial assets, net of tax					(151	)		—				—			(151	)		1,327			—			—			1,327
Net change in fair value of available-for-sale financial assets transferred to net loss, net of tax					(259	)		—				—			(259	)		(118	)		—			—			(118	)
Other comprehensive income for the period					(410	)		—				—			(410	)		1,209			—			—			1,209
Total comprehensive income for the period					(12,777	)		(2	)			—			(12,779	)		(9,151	)		(142	)		—			(9,293	)

35

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8.	Transition to IFRS (continued):
	Material adjustments to the consolidated statement of cash flows for 2010 and 2009:
	There are no material differences between the consolidated statement of cash flows presented under IFRS and the consolidated statement of cash flows presented under previous Canadian GAAP.
	Notes to the reconciliations:

(a)	Reclassification in the consolidated statement of financial position:
	Certain corresponding figures as at December 1, 2008, November 30, 2009, August 31, 2009 and 2010 have been reclassified to conform to the new presentation under IFRS.
(b)	Share-based compensation:
	In certain situations, stock options granted vest in installments over a specified vesting period. When the only vesting condition is service from the grant date to the vesting date of each tranche awarded, then each installment should be accounted for as a separate share-based payment arrangement under IFRS, otherwise known as graded vesting. Canadian GAAP permits an entity the accounting policy choice with respect to graded vesting awards. Each installment can be considered as a separate award, each with a different vesting period, consistent with IFRS, or the arrangement can be treated as a single award with a vesting period based on the average vesting period of the installments depending on the policy elected.

36

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8. Transition to IFRS (continued):

(b)	Share-based compensation (continued):
	The Company’s policy under Canadian GAAP was to treat graded vesting awards under the latter method and, as a result, an adjustment of $175 was required on the application of IFRS 2 at the transition date and an adjustment of $98 was required for the restated November 30, 2009, $142 for August 31, 2009 and ($2) for August 31, 2010 comparative balances as shown below:

	December 1,			November 30,			August 31,			August 31,
	2008			2009			2009			2010
	$			$			$			$
Consolidated statement of comprehensive income:
Increase in research and development expenses		—			33			64			(44	)
Increase in selling and market development expenses		—			10			8			8
Increase in general and administrative expenses		—			55			70			38
Adjustment to net loss and total comprehensive loss		—			98			142			2
Deficit		(175	)		(273	)		(317	)		(275	)
Increase in contributed surplus		175			273			317			275

(c)	Reclassification in the consolidated statement of comprehensive income:
	Under IFRS, the Company elected to present expenses using a classification based on their function and presents net finance income separately. The effect of these changes is summarized below:

	November 30,			August 31,			August 31,
	2009			2010			2009
	$			$			$
Decrease in interest		(2,252	)		(1,522	)		(1,724	)
Increase in finance income		2,252			1,522			1,724
Increase in research and development expenses		346			421			226
Decrease in patent fees		(346	)		(421	)		(226	)
Decrease in general and administrative expenses		(661	)		(155	)		(605	)
Increase in finance costs		661			155			605
Increase in selling and market development activities		4,269			—			4,269
Decrease in other expenses		(4,269	)		—			(4,269	)
		—			—			—

37

THERATECHNOLOGIES INC.
Notes to the Consolidated Financial Statements, Continued
(Unaudited)

Nine-month periods ended August 31, 2010 and 2009
(in thousands of Canadian dollars, except per share amounts)

8. Transition to IFRS (continued):

(c)	Reclassification in the consolidated statement of comprehensive income (continued):
	Changes in presentation were also made to the revenue caption in order to conform with the new presentation under IFRS as noted below:

	November 30,			August 31,			August 31,
	2009			2010			2009
	$			$			$
Decrease in royalties and license fees		(17,444	)		(5,134	)		(15,732	)
Increase in upfront payments and initial technology access fees		6,560			5,134			4,848
Increase in milestone payments		10,884			—			10,884
		—			—			—

38