TG Therapeutics, Inc. (NASDAQ:TGTX) Q1 2024 Earnings Call Transcript

TG Therapeutics, Inc. (NASDAQ:TGTX) Q1 2024 Earnings Call Transcript May 2, 2024

TG Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings, and welcome to the TG Therapeutics Conference Call and Webcast. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenna Bosco. Thank you, Jenna. You may begin.

Jenna Bosco: Thank you. Welcome, everyone, and thanks for joining us this morning. I’m Jenna Bosco, and with me today to discuss the first quarter 2024 financial results are Michael Weiss, our Chairman and Chief Executive Officer; Adam Waldman, our Chief Commercialization Officer; and Sean Power, our Chief Financial Officer. Following our safe harbor statement, Mike will provide an overview of our recent corporate development, Adam will share an update on our commercialization efforts, and Sean will give an overview of our financial results before turning the call over to the operator to begin the Q&A session. Before we begin, I’d like to remind everyone that we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include statements about our anticipated future operating and financial performance, including sales performance, projected regulatory or clinical milestones, revenue guidance, development plans and expectations for our marketed products. TG cautions that these forward-looking statements are subject to risks that may cause our actual results to differ materially from those indicated. Factors that may affect TG Therapeutics operations include various risk factors that can be found in our SEC filings. In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any later date. We specifically disclaim any obligation to update or revise any forward-looking statements.

This conference call is being recorded for audio rebroadcast on TG’s website, www.tgtherapeutics.com, where it will be available for the next 30 days. With that, I’d like to turn the call over to Mike Weiss, our CEO.

Michael Weiss: Great. Thanks, Jenna, and good morning, everyone, and thanks for joining us on today’s call. 2024 is off to an exciting start, and I’m incredibly proud of the accomplishments already achieved this year. Company-wide, it feels like we are firing on all cylinders. A prime example was the recent announcement of the award of the VA contract for Briumvi as the preferred anti-CD20 for the VA system. We cannot be more excited to be able to support our veterans with multiple sclerosis by offering Briumvi at a deep discount. We see this as a great way to serve our veterans, introduce Briumvi to additional health care providers, many of whom split their time between the VA and their academic appointments and, of course, generate incremental revenue.

As for the first quarter, the demand for Briumvi was extremely strong, and I’m pleased to report that the U.S. Briumvi revenue was in excess of $50 million, and total revenues for the quarter were over $63 million, which includes milestone payments received from our ex-U.S. partner. By any measure, it was a robust revenue quarter for TG. As mentioned previously, starting in late 2023 and continuing, we have significantly increased our investment in patient awareness activities and strategically increased the size of our commercial team. I have to believe these investments contributed to the strong first quarter results. More broadly, our team continues to be focused on our long-term goal of becoming the number one prescribed anti-CD20 from a dynamic market share perspective.

And the feedback from physicians, patients, nurses and infusion centers continues to drive our confidence that is achievable. We believe that Briumvi has best-in-class profile that should help us get there. Briumvi is the only anti-CD20 monoclonal antibody that can be given as a 1-hour infusion every six months following the starting dose and is the only anti-CD20 monoclonal antibody in Phase III trial to achieve an annualized relapse rate of less than 0.10. Also in Phase III trials, the Briumvi in 1-hour infusion was generally well tolerated with 95% of the 1-hour infusions being delivered on time. Beyond the clinical data, Briumvi is also differentiated by design, having been glycoengineered for enhanced immune effector cell engagement and efficient B-cell depletion.

As previously presented, preclinical data demonstrates that compared to the other anti-CD20s approved or used to treat MS, Briumvi has the highest binding affinity to CD20, the target found on the B cells and through its glycoengineering has the ability to induce the highest level of antibody-dependent cellular cytotoxicity. We look forward to evaluating these preclinical differences further to assess what, if any, contribution than they have to Briumvi’s differentiated clinical profile, and we will seek to show these data when available. We’re also excited to share during the quarter that there were three newly issued patents from U.S. Patent and Trademark Office extending patent protection for Briumvi through 2042. With the extended runway, our development team is focused on potential expansion opportunities for Briumvi, both within MS as well as in other autoimmune diseases.

To that end, we are focused on three Briumvi-related initiatives this year, which we believe could drive significant future value. First is further improving the convenient dosing of IV Briumvi. In March, at the ACTRIMS conference, we presented updated data from the ENHANCE trial, evaluating the safety and efficacy of eliminating the 4-hour Briumvi 150 milligram starting dose for patients who switch from a prior anti-CD20. Data presented suggests that Briumvi was well tolerated for patients that skipped the starting dose and went straight to the first full 450-milligram dose given as a 1-hour infusion. These early results are encouraging, and we look forward to continuing to present additional efficacy, safety and tolerability data from this study throughout the year.

Second is the development of subcutaneous Briumvi. We believe the subcu CD20 market is distinct from the IV market and believe this could represent a significant additional opportunity for Briumvi. We are preparing to enter human bioequivalence studies this year and look forward to providing additional updates on this front as we have them throughout the year. And third, we look forward to evaluating Briumvi in other autoimmune indications. The goal is to launch our first autoimmune trial evaluating Briumvi outside of multiple sclerosis later this year. We believe the expansion of Briumvi represents a significant opportunity, and we look forward to providing updates throughout the year, but we are not stopping there. The future of TG also lies in the expansion of our portfolio.

We recently entered into a partnership with Precision BioSciences to acquire a worldwide license to Precision’s azer-cel, an allogeneic CD19 CAR T cell therapy for autoimmune diseases and all other non-oncology indications. We believe azer-cel has the potential to be a first-in-class, best-in-class treatment for certain autoimmune diseases, and we look forward to commencing a clinical trial this year. I also want to congratulate our partners at Neuraxpharm on their launch of Briumvi in Europe, which also occurred in the first quarter, with the first commercial sale in Germany. Transitioning the program to enable their timely launch took significant effort from our team, and I’m proud of how everyone worked so closely together to make it happen.

The Neuraxpharm team is experienced, motivated and focused, and we look forward to hearing more from them as the launch progresses to multiple countries across Europe and then around the globe. Finally, I want to thank and acknowledge the entire TG team. It’s amazing to see the focused attention and care that TG-ers take to ensure the best possible experience for patients with MS. While we spent a lot of time on these calls talking about numbers, the most gratifying part of my day is hearing firsthand from patients taking Briumvi and the positive experiences as well as HCP’s anecdotes about their patient’s treatment successes with Briumvi. With that, let me hand the call over to Adam Waldman, our Chief Commercialization Officer, to provide a detailed update on the Briumvi U.S. commercial launch.

Adam, go ahead.

Adam Waldman: Thank you, Mike, and good morning, everybody. I’m excited to provide insights into our continued commercial progress in the first quarter. This was another very strong quarter of performance, exceeding our revenue guidance in all of our key performance metrics. Our focus on delivering Briumvi to patients remains unwavering, and I’m pleased to share our progress with you today. In the first quarter of 2024, we continue to see strong uptake of Briumvi in the market. As reported in our press release, first quarter net sales in the U.S. for Briumvi were $50.5 million, representing 25% growth quarter-over-quarter. The first quarter number exceeded our original guidance of $41 million to $46 million provided in early January as well as our updated guidance we provided in late February.

The trends we saw early in the quarter continued throughout the quarter, reflecting strong and growing demand for Briumvi. This growth is particularly impressive given the first quarter challenges associated with beginning of the year payer dynamics. In fact, we were the only CD20 in MS to see revenue growth quarter-over-quarter in the U.S. market during this timeframe. Equally impressive is that we also saw enrollments grow by approximately 25%, with over 1,250 new patient scripts received by the TG hub in the quarter. I want to congratulate our team on doing an exceptional job preparing for the inherent insurance-related challenges seen in the first quarter and mitigating the potential impact. Since launch, we’ve implemented a comprehensive commercial strategy that encompasses targeted educational initiatives; engaging health care providers, both virtually and in-person; and leveraging digital marketing channels to reach a broader patient audience.

Our efforts have resulted in increasing uptake of Briumvi, with health care providers recognizing the value that Briumvi brings to patients. Concurrently, ensuring patient access to Briumvi remains a top priority for us. We continue to receive exceptional feedback on the comprehensive patient support programs we have introduced to assist patients in navigating reimbursement challenges and accessing the treatment they need. We also continue to make significant strides in expanding our market presence. Through targeted marketing initiatives and effective sales force deployment, we successfully penetrated new accounts and prescribers, driving sustained growth. We saw both increasing number of repeat prescribers and impressive gains in new prescribers, with approximately 160 new prescribers in the first quarter, the majority of which were from academic centers.

We also continued to convert new centers, adding 65 new accounts in the quarter. To date, we have seen broad adoption of Briumvi by across the U.S. with new prescriptions coming from over 450 centers and over 800 unique prescribers. Encouragingly, we also continue to see a diverse mix of patient types, including those that are naive to all treatments and those that were previously treated and switched from both non-CD20 and CD20 agents. This mix of patient types continue to be fairly consistent quarter-to-quarter, with the largest group consisting of patients that were previously treated, but naive to anti-CD20 therapy. 2024 is off to a really strong start. We achieved record Briumvi new patient enrollments into our hub in the first quarter and far exceeded our first quarter revenue guidance and continued to show strong quarter-to-quarter growth, despite the first quarter insurance headwinds.

We continue to see momentum building into the second quarter. And based on the information we have available at this time, we are targeting Briumvi net revenue of approximately $65 million for the second quarter. In terms of the full-year, we continue to feel confident about the Briumvi trajectory. Based on current trends, we believe we are tracking above the top end of our original guidance of $220 million to $260 million and are therefore raising our full year guidance to $270 million to $290 million. Looking ahead, we see promising opportunities for further growth and expansion. We believe we are poised to broaden our reach and make an even greater impact on the MS patient community. We continue to believe Briumvi’s profile remains very compelling and will eventually be the IV therapy of choice in the relapsing MS market.

In conclusion, I want to thank our team for their dedication and hard work. They have executed the launch plan with precision, driving awareness and adoption among our targeted health care providers, and we believe their outstanding efforts are contributing to the positive experience with Briumvi and confidence in our organization. I also want to thank the health care providers and their patients for their trust in TG Therapeutics. Together, we will continue to improve outcomes for those in need, and we certainly have more work to do, but we are focused and extremely motivated to continue to work every day to bring Briumvi to those people living with MS and their families. With that, I’ll turn the call over to Sean Power, our CFO. Sean?

Sean Power: Thank you, Adam, and thanks, everyone, for joining us. Earlier this morning, we reported our detailed first quarter 2024 financial results, which can be viewed on the Investors & Media section of our website. This morning, I’ll start with a discussion of our revenue. We are pleased to report total revenue of approximately $63.5 million during the first quarter of 2024, which, as previously mentioned, includes $50.5 million of U.S. Briumvi net product revenue. Also included in our Q1 2024 revenue total is approximately $13 million of license milestones, royalty and other revenue, which consists primarily of the $12.5 million milestone we received from our ex-U.S. partner for the first commercial launch of Briumvi in the EU.

Our OpEx during the first quarter of 2024, despite some onetime charges, has remained well controlled and in line with previously discussed ranges. For the first quarter of 2024, our operating expenses were approximately $58 million, which includes onetime charges to research and development expenses of approximately $8.8 million related to our agreement with Precision BioSciences for the in-licensed azer-cel program. During the first quarter of 2024, we also saw a modest increase in R&D expenses, driven by manufacturing and development costs associated with our ublituximab subcutaneous development work. On the back of the reported revenues and well-controlled OpEx, during the first quarter of 2024, we reported a modest net loss of approximately $10.7 million or $0.07 per share compared to a net loss of approximately $39.2 million or $0.28 per share during the comparable quarter in 2023.

From a cash standpoint, we ended the first quarter with $209.8 million in cash, cash equivalents and investment securities, down less than $10 million from Q4 of 2023. We believe our current cash position, coupled with our previously guided revenue and expense guidance, provides us with sufficient capital to fund our operations to cash flow positivity. With that, I will now turn the call over to the conference operator to begin the Q&A.

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Q&A Session

Operator: Thank you. We will now be conducting a question-and-answer session [Operator Instructions]. Our first question comes from the line of Michael DiFiore with Evercore. Please proceed with your question.

Michael DiFiore: Hi. Good morning guys. Thanks for taking my question. And congrats on all the great projects this quarter. A couple for me. Regarding sales in EU, I know it’s very early, but when could we expect Neuraxpharm to begin offering details? And I have two follow-ups? Thank you.

Michael Weiss: Yes. So in terms of Neuraxpharm providing public details, I think we’re a long way off. They are a private company, private equity backed, so I don’t anticipate they’ll be providing any public guidance or information to my knowledge. Adam, anything different from your side?

Adam Waldman: No, no. Nothing to add there.

Michael DiFiore: Okay, okay. Fair enough. And my other two questions are, how much of Briumvi’s fiscal year 2024 guidance raise was due to the recently announced VA contract? And any color that you could provide on pricing or increased rebating in this segment? I know you said it’s heavily discounted.

Michael Weiss: Yes. Adam, go ahead.

Adam Waldman: Sure. Yes, the revenue raise was really – the VA was not really factored in for a couple of reasons. One, this won’t go into effect until June. Second, it will be a gradual sort of increase as new patients get on. Patients will only really have the opportunity in this year to have the first two infusions at best. So it will be a gradual increase, and it wasn’t really a factor in the way that we looked at raising our guidance. The guidance was raised based on the demand trends that we’re seeing. As far as pricing, I think that’s out there and public. We offered about a 72% discount, roughly about $2,900 a vial.

Michael DiFiore: Okay. Great. And my last question is this. In the most recent cut of the enhanced data presented at ACTRIMS, three patients in Cohort 2 had to have their infusion slowed down or interrupted. Any color on these patients? How long would these infusions slowed down to or interrupted for? And were there any unique clinical features of these patients that could explain this?

Michael Weiss: So no, I don’t think there was anything particular about the patients, but the infusions were pretty modest. And I think all we’ve done reasonably close to the 1-hour anyway. So no, I think it was just basic stuff that is typical of infusions. But I don’t think there’s anything to be worried about there. It was well tolerated overall, and those patients did well.

Michael DiFiore: Got it. Thanks so much. Congrats, again.

Operator: Our next question comes from the line of Ed White with H.C. Wainwright. Please proceed with your question.

Edward White: Good morning. Congratulations on the results. Thanks for taking my questions. So the – just to clarify what you just said on the VA contract, Adam. Was it a 72% discount?

Adam Waldman: Yes.

Edward White: Okay. Thank you. And this has been brought up before, but I just wanted to address it again. Thinking about the potential opportunity in the so-called crap-gap with OCREVUS. Is this something that you think you’ll be able to produce data on or somehow address this with your sales force?

Michael Weiss: Yes. So in terms of crap gap and being able to show, I mean, we’re trying to capture as much data as we can through the ENHANCE study. I think the number is about 50 to 60-ish percent. Maybe two-thirds report crap-gap as they’re coming into the ENHANCE trial. So we’ll try to capture some of that information on the back end. Hopefully, we’ll have at least some anecdotal information about patients reported, whether they’re or not seeing the crap-gap. It’s hard – there’s no scale to objectively measure crap-gap. There’s no – so it is a challenging thing to measure, but we’ll do the best we can within the ENHANCE study. And whatever studies that we conduct, we will certainly try to parse out the effect and whether we’ve changed that for patients.

Edward White: Okay. Thanks, Mike. And just – when thinking about other potential indications, how do you prioritize outside of MS? I’m sure you have plenty of factors in there, but where does time to potential approval come in or size of the potential market? How are you sort of ranking that?

Michael Weiss: Yes. I mean, I think, look, we’re probably focused on things like RA and lupus for Briumvi outside of MS sort of larger indications. And as we’ve said previously, in some more niche indications, we would be looking at azer-cel.

Edward White: Okay, Mike. Thanks for taking my questions.

Michael Weiss: Thanks, Ed.

Operator: Our next question comes from the line of Roger Song with Jefferies. Please proceed with your question.

Roger Song: Great. And my congrats to the 1Q results. And then so just a couple of questions from us. One is understanding your hub is capturing most of the new patients and given you have quite a few quarters since launch, so how would you characterize the repeat infusion rate you have been seeing?

Michael Weiss: Yes. Adam, do you want to go ahead on that one?

Adam Waldman: Yes. So yes, just to reconfirm here, the patient hub numbers that we’re giving you are new patients only. So just to – I think that was your question there. And then as far as persistence, we would say we’re still early in the – with our data, and we continue – but however, the data that we see, we continue to see that the 24-week persistence is in line or maybe slightly better than our expectations of about 85%, week 24. So we feel pretty good about it. Although the data is early, we’ll continue to look at it. But right now, it’s in line or maybe slightly ahead of what we expected.

Roger Song: Excellent. 85% is good. And then so you are having now 800 health provider and around 450 centers. So understanding where you start to – when you plan to launch, you are targeting top 50 accounts covering 70% to 80% with MS patients. Just curious, is that still the goal for the provider or the center outreach? And then if that’s still the case, then when do you expect you will achieve that $550 million from $450 million?

Adam Waldman: Yes, yes. So I think if I understand the question, it’s what’s our goal in terms of new accounts and new prescribers. I’ll just say that I think we’ve done really good. We’ve got broad adoption right now, but we certainly see opportunity for more adoption with even more prescribers and, of course, deepening the use with our current prescribers. The good news in the quarter as we saw increases in both repeat prescribers and adding new prescribers at a pretty good clip and new accounts at a pretty good clip. So we feel good about it. We’re continuing to make progress every day and certainly have opportunity, but feel good about where we’re at right now.

Roger Song: Great. Thank you. One last question related to the financials. So I think earlier this year, you’re guiding the OpEx as $250 million for the year. Just want to confirm, is that still the guidance for now? And then also curious about the [indiscernible] for the coming years given you continue to launch and expanding your pipeline? Thank you.