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Edited Transcript of TGTX earnings conference call or presentation 10-May-19 12:00pm GMT

Q1 2019 TG Therapeutics Inc Earnings Call

NEW YORK May 27, 2019 (Thomson StreetEvents) -- Edited Transcript of TG Therapeutics Inc earnings conference call or presentation Friday, May 10, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jenna Bosco

TG Therapeutics, Inc. - VP of IR & Senior VP of Corporate Communications

* Michael S. Weiss

TG Therapeutics, Inc. - Executive Chairman, CEO & President

* Sean A. Power

TG Therapeutics, Inc. - CFO, Corporate Secretary & Treasurer

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Conference Call Participants

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* Alethia Rene Young

Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research

* Edward Patrick White

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Matthew Lee Kaplan

Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research

* Peter Richard Lawson

SunTrust Robinson Humphrey, Inc., Research Division - Director

* Reni John Benjamin

Raymond James & Associates, Inc., Research Division - Former Senior Vice-President & Senior Biotechnology Analyst

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Presentation

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Operator [1]

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Greetings and welcome to the TG Therapeutics First Quarter 2019 Financial Results and Business Update Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jenna Bosco. Please go ahead.

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Jenna Bosco, TG Therapeutics, Inc. - VP of IR & Senior VP of Corporate Communications [2]

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Thank you. Good morning and welcome to our conference call regarding TG Therapeutics' First Quarter 2019 Financial Results and Business Update. I am Jenna Bosco, TG's Senior Vice President of Corporate Communications and I welcome you to our conference call today.

Following our safe harbor statement, Sean Power, TG's Chief Financial Officer, will provide a brief overview of our financial results and then turn the call over to Michael Weiss, the company's Executive Chairman and Chief Executive Officer, who will provide an update on the ongoing development of our lead compounds, ublituximab and umbralisib, as well a high level overview of our early stage programs and overall company standing.

Before we begin, I would like to remind everyone that various remarks that we make about our future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. TG cautions that these forward-looking statements are subject to risks and uncertainties 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.

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. All participants on this call will be on a listen only mode.

Now I would like to turn the call over to Sean Power, our Chief Financial Officer, to briefly discuss the financial results for the first quarter of 2019 as well as the company's overall financial condition.

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Sean A. Power, TG Therapeutics, Inc. - CFO, Corporate Secretary & Treasurer [3]

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Thank you, Jenna, and thanks, everyone, for joining us. As you may be aware, our financial results were released earlier this morning and can be viewed on the Investors & Media section of our website at www.tgtherapeutics.com.

I'll begin with our cash position. During the quarter, we were able to complete a public equity offering and debt financing to strengthen our balance sheet, leaving us with cash, cash equivalents and investment securities of $92.5 million as of March 31. To ensure that we remain well positioned to execute on our goals subsequent to the quarter end, we utilized our ATM sales facility to raise additional net proceeds of $24.2 million for a pro forma cash position as of March 31, 2019, of approximately $116.7 million. Our average price during this ATM campaign was $8.11 and total shares issued were approximately $3 million. Inclusive of the capital raised during the first and second quarters, we believe our current cash position will be sufficient to fund our operations through mid-2020.

Further, additional potential borrowing capacity under our venture debt facility would extend our cash run rate through the third quarter of 2020. Our net loss for the first quarter of 2019 excluding noncash items was approximately $33.3 million, while our GAAP net loss for the first quarter was $35.2 million or $0.43 per share compared to a net loss of $41.5 million or $0.59 per share during the comparable quarter in 2018.

As we've been saying for a number of quarters, our R&D spend would begin to decrease as our registration directed trials in both oncology and MS progressed into 2019 and we've now begun to realize some of that, which is a major contributing factor to our decrease in net loss versus the comparable period in 2018. We expected that this trend will continue over the next several quarters.

With that, I will now turn the call over to Mike Weiss, our Executive Chairman and CEO.

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [4]

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Great, thanks, John. And thanks, Jenna, of course. And thank you all for joining us this morning. I know I can speak for everyone at TG in saying we are all super excited about the developments thus far this year with the achieving of many key milestones. Top on the list, of course, has been the significant progress made with our marginal zone lymphoma program, including the release of positive top line results and the receipt of breakthrough designation and orphan drug designation.

Moving forward, we believe further clarity on our potential MZL NDA filing, hopefully by year end, along with the presentation of final data, also toward the end of the year, has the potential to unlock significant value for our shareholders. And once that occurs, we believe the other layers of potential approvals and combinations within our robust B-cell pipeline will come into focus for investors highlighting the value we are bringing to patients with B-cell cancers and further translating into significant additional value to our shareholders.

With that, let's start the call by highlighting some of the notable achievements thus far in 2019.

In January, we received breakthrough therapy designation from the FDA for umbralisib for the treatment of marginal zone lymphoma or MZL. Also in January, we announced publication of clinical data from the Phase I triple therapy combination of ublituximab plus umbralisib plus ibrutinib in Lancet Haematology.

In February, we launched a first in human Phase I trial of TG-1801, our CD47, CD19 bispecific antibody in patients with relapsed or refractory B cell lymphoma and later that month we announced the most important news of the quarter, the positive outcome from the Unity NHL Phase IIb pivotal trial of umbralisib monotherapy in patients with relapsed or refractory marginal zone lymphoma. Following which, as Sean noted, we secured approximately $85 million in equity and debt financings.

We then kicked off the month of March by announcing positive DSMB reviews of both the Unity CLL and the Unity NHL trials where no safety issues requiring study modification were reported and that the Unity CLL had successfully cleared a fertility PFS analysis.

We opened up April with the oral presentation given by Dr. Nathan Fowler of the MD Anderson Cancer Center at AACR Annual Meeting reporting positive interim data from the MZL cohort from the Unity NHL trial. Shortly after, we received orphan drug designation from the FDA for umbralisib for the treatment of MZL and just this week we announced long-term follow-up safety data from the open label extension study of the Phase II trial of ublituximab in multiple sclerosis, demonstrating that ublituximab remains well tolerated with median duration of follow-up of 97.5 weeks and no patients discontinuing from the open label extension study due to an adverse event.

Now let me quickly provide some highlights from the ongoing pivotal trials. Again, let's start with the Unity NHL study where marginal zone lymphoma has taken center stage. The MZL cohort includes 69 patients treated with single agent umbralisib and the primary endpoint for this single arm study is overall response rate as confirmed by an independent review committee or IRC. As I already mentioned, there have been a few very important developments with this program during the first quarter and again, the most significant of which is that the overall response rate for the entire treated population of 69 patients met the study's primary endpoint as well as our internal target overall response of 40% to 50%.

Next step for us is to meet with the FDA to discuss a potential accelerated approval filing. If all goes well, our goal would be to file for accelerated approval by year-end.

Next, let me provide some highlights from our Unity CLL trial, which is a randomized study of U2, so that's umbralisib plus ublituximab, in patients with both treatment naive and relapsed or refractory chronic lymphocytic leukemia or CLL. The DSMB, as I noted above, recently met and reviewed safety from this study and again determined there were no safety issues requiring modification of this trial. It's worth noting that a significant portion of the patients in this trial are treatment naive patients with CLL and there are no other PI3K deltas approved in first line CLL, in large part due to safety concerns.

The primary endpoint for this trial is progression-free survival, which is an event-driven end point, meaning that we need to see a certain number of patients who have progressed or passed away before we can call the study complete and analyze PFS. This, of course, makes predicting precisely when the study will complete somewhat challenging, which we've been talking about for several quarters now. That said, our current estimate is PFS can read out before the end of this year if our original power assumptions of approximately 40% to 50% improvement in PFS are realized and the control arm forms in line with recent studies using that same control arm. Otherwise, if events take longer than expected, the study could push into 2020. We remain extremely optimistic about the study and the prospects for a successful PFS result. As mentioned earlier, the DSMB recently conducted a successful interim PFS fertility analysis and recommended that we continue the study.

We continue to believe U2 is a very attractive treatment option for patients with CLL providing an important alternative to BTK-based therapies, especially in those patients who are not good candidates for or who otherwise have tolerability issues on BTK therapy.

Next, I'd like to highlight some aspects of our MS program, which we continue to believe is not fully appreciated by investors. Last week at AAN, we presented data from the open label extension or OLE of the Phase II trial, which continues to show that ublituximab is well tolerated now with the median follow-up of 97.5 weeks. Additional highlights from the final Phase II data included annualized relapse rate of 0.07 and 100% reduction in Gd-enhancing lesions. We believe the Phase II results are highly supportive of our ongoing ultimate Phase III program and our belief that ublituximab can deliver a best in class profile that includes comparable to better efficacy, comparable safety, convenience and price over available MS therapies.

As a quick reminder, the Ultimate 1 and 2 Phase III trials in MS are comparing ublituximab to an active control of teriflunomide in subjects with relapsing forms of MS known as RMS. The primary endpoint for each study is annualized relapse rate following 96 weeks of treatment. Both trials have completed enrollment and we expect data in mid-2020. It's also worth noting that we had some great KOL meetings at AAN and there was great interest in ubli and its value proposition. We continue to be impressed with the enthusiasm for the 1-hour infusion and the potential we have to strategically price ubli to enhance access to patients.

It's worth noting that ocrelizumab, the only CD20 currently approved for MS, is anticipated to generate approximately $4 billion in revenue in 2019 in only its second full year of launch. Clearly this represents a very large market potential for CD20 in MS and even a small portion of this market would result in significant value to shareholders.

And finally as mentioned earlier, in addition to our exciting pivotal data, we currently have and continue to build a robust portfolio of early clinical drug candidate that in combination with U2, we believe can drive us closer and closer to our goal of curing certain populations of patients with B-cell cancers, adding another layer of growth and value for our shareholders. Included in an early pipeline are TG-1501, our anti-PD-L1 antibody, TG-1701, our novel BTK inhibitor, and our most recently licensed compound, TG-1801, our novel anti-CD47, CD19 bispecific antibody.

We plan to share more about these compounds as the year progresses and it is possible that one or more of these compounds can advance into pivotal trials in 2020.

With that, I'd like to turn the call over to conference operator to begin the Q&A session, following which I will return and provide some concluding remarks.

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Operator [5]

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(Operator Instructions) Our first question today is coming from of Alethia Young from Cantor Fitzgerald.

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Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [6]

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Congrats on the progress over the [court]. Two questions. Just on the NHL study, can you just discuss kind of how you're thinking about reading out maybe the follicular arm now? I know you obviously have the MZL data and focused on that, but I just wanted to kind of make sure I was square on the timelines. And then also in the MZL data, I guess I'm just curious how you guys think about what the potential probabilities are around how much follow-up may be needed? I know you have to have the conversation with the FDA, but I'm sure you're kind of working through some scenarios in your head, so just wanted to hear a little bit more about that.

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [7]

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Sure, so I'll start with the margins, then we will work backwards to follicular. So in terms of follow-up needed, right now we believe we will have a good 9 months of follow-up on all patients. Even if the FDA asks us for 12 months of follow-up, I still believe we can have the filing in by year-end, but again, it's hard to know exactly what they're going to look for until we sit down with them. But our feeling is 9 or 12 of follow-up and each patient gives us a median follow-up of -- let me see if I can find more than that. I think it's like 15 to 18 months depending on the 2 timelines, both of which would be reasonably consistent with the follow-up of ibrutinib when it was approved to marginal zone. So we're in the range. I think we're -- it's relatively tight, but -- in terms of what the alternatives are, but we'll see. Again, I don't want to get out over my skis until we have that conversation. And once we do, obviously we will make people aware of the timelines from there. So I think that's an important next step for us to get that clarity.

In terms of the follicular arms, as we were saying to a lot of folks, we've been sort of guiding since the marginal zone. We're really focusing all of our resources right now on getting the marginal zone data cleaned and ready for potential filing. Again, that also depends on how much follow-up is required. We'll also add to the workload required to clean that database. Having said that, once we finish that and get that filing in, we will turn our attention to either CLL or follicular and work on cleaning those. Again, if the CLL data is not available, we will turn the team's attention to cleaning and getting the follicular data ready for presentation and filing. So our best assumption -- our best guess at this point is that follicular is closer to the end of the year or into 2020 in terms of top line with a potential filing for follicular middle of next year.

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Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [8]

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Just so maybe another follow-up on CLL, with this I get a 60:40 split between the naive. How do you -- what's your confidence level going to be enabled to get earlier line, versus kind of maybe like a second or third line label there?

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [9]

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Yes, so the study is designed for both first line and relapse refractory. Again, there's 60% of the patients are in treatment naive patients, so I think we're -- our full expectation is that the label would be broad enough to cover both treatment naive and relapsed refractory. I don't see a scenario where we are -- we do not get the first line and we get the second line instead, because again, the majority of the patients are first line. Yes, I think if the study is successful, which we expect it will be, we expect to have both groups. The only caveat that we know about is that if the -- if directionally or rather internal consistency of the 2 groups is not the same, then potentially we would only get one group, but again thinking about the question of front line versus relapse refractory, it would be almost impossible to imagine a situation where the relapse refractory were so positive that it carried the entire trial and so that -- thus we only receive the relapse refractory. It's potentially more likely that the frontline carries and the relapse refractory doesn't get there, but again because of the split, which is almost even, both groups really need to contribute to have a successful outcome. So I just -- I don't envision a scenario where both are not on the positive side of things. Again, they don't -- each group doesn't have to be statistically significantly better than its counterpart group, but the expectation is that both groups will be contributing to the ultimate successful outcome.

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Operator [10]

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Your next question today is coming from Ren Benjamin from Raymond James.

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Reni John Benjamin, Raymond James & Associates, Inc., Research Division - Former Senior Vice-President & Senior Biotechnology Analyst [11]

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Mike, can you talk a little bit about sort of your confidence regarding the PFS timeline? And I guess you mentioned the DSMB met, but every time they meet, do you get a sense of how many events have taken place and do you have a sense as to how many patients remain on therapy? Because I think the way the design of the trial is, is that they can remain on the experimental combination therapy for as long as they're responding versus the control arm.

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [12]

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Yes, so patients will stay on, on therapy as long as they are gaining benefit and/or continuing to have benefit and are not having tolerability issues. So yes, there -- the patients in the control arm, as you've described, are getting a 6-month course of therapy and then we see how long it takes for them to relapse. The vast majority, of course, will relapse at some point, then the median for the control arm is expected to be for front line patients anywhere from 19 months, which is what we saw in the Illuminate trial, to 26 to 27 months, which we saw in the CLL 11 trial.

Relapse refractory patients is not a good measure, but you can sort of cut almost in half the expectation of PFS from first line to relapsed refractory. Again, it's just a ballpark. I think -- so in terms of predicting the end of this thing, again we believe and it's -- this is our belief, we believe that the control arm is well known enough that the probability that it's going to dramatically shift is relatively unlikely. So again, between Illuminate and CLL 11, you've got a bracket of 19 months to 27 months in front line patients. Again if you assume approximately half of those 2 numbers is what you'd expect to see in relapsed patients, you've got a pretty well fixed PFS and we have modeled within a relatively good range there from 18 to 22 months, I think, of total PFS. We've modeled that out. Doesn't -- it is not very sensitive to those kinds of changes when you're out. Our follow up is pretty good at this point and getting better. By the end of this year, we will have almost 20, 30 months of median follow up. So again, if you think about any potential PFS for that group of 18 to 22 months on a blended basis, at 30 months of follow-up, it's hard to imagine that, that entire population hasn't reached their median, right? So assuming that, that group is fixed, then the only potential variable is whether our performance is better than expected, right, in terms of benefit over the control arm. The study, as we've described it a few times, is powered for about 40% to 50% improvement in progression-free survival. If in fact the control arm performs as we've described relatively in line with the numbers and we have a 40% to 50% improvement, the study should be over by the end of this year.

Again having said that, assuming the control arm is well fixed, if our arm is performing better than 40% to 50% improvement over their PFS, then it will go into 2020.

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Reni John Benjamin, Raymond James & Associates, Inc., Research Division - Former Senior Vice-President & Senior Biotechnology Analyst [13]

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Got it. I just want to confirm though that you don't have sort of updated events as every time the DSMB meets that you have an idea as to how it is progressing. It is still based on model. You're blinded completely to the trial results so far.

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [14]

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We are completely blinded to the trial results.

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Reni John Benjamin, Raymond James & Associates, Inc., Research Division - Former Senior Vice-President & Senior Biotechnology Analyst [15]

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Got it. Just following up with MZL, the landscape continues to shift. We get questions regarding lenalidomide and rituxan approval or potential approval. Can you just talk about how you're seeing -- I'm sure you're seeing the landscape just as we are -- how that might impact your application timeline's chances for approval? Then, I guess most importantly, use in the commercial setting.

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [16]

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Yes, so in terms of marginal zone, it doesn't look like a lot is changing as far as we can tell. So we do feel like we have a pretty good path forward to approval. In terms of the commercial application, look, there's a need for non-chemotherapy options in the treatment of patients with marginal zone lymphoma. Ibrutinib overall is a very good drug. Obviously, I think I'd argue it's a better drug in CLL than it is in marginal zone, but it's a good drug overall. But as we've described in many situations, it's not perfectly tolerated, it's not for everybody. We think that umbralisib, the profile that we've seen thus far in the 42 patients that we presented at AACR and if that profile were to continue, we think that it is a more attractive profile for patients with marginal zone lymphoma. We think we have a very good opportunity that we would be the first chosen small molecule non-chemotherapy for patients with marginal zone lymphoma. We have -- appears to be at least a, on the surface, a higher response rate, but probably more importantly are the differences in complete response rates and the median time to onset of response. So if you're a patient, and again, assuming that the data holds up through the final analysis, if you're a patient and you have a choice between the 2 options, one has a median time to response of about 2.5 months and one has median time to response of about 4.5 months, so you get to know sooner if you're getting a good reaction to the drug. And you have a higher probability of getting a complete response rate. So again, we think it's an attractive profile. Obviously, it's not a head-to-head comparison, because they were never studied against each other, but we think we've got -- we will have a nice label to talk about, just our drug and we think it is attractive for marginal zone patients.

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Reni John Benjamin, Raymond James & Associates, Inc., Research Division - Former Senior Vice-President & Senior Biotechnology Analyst [17]

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Got it. And just one final question for me. I think in your response to Alethia, I just want to make sure. The Unity NHL study, I thought we had 2 readouts expected in the middle of the year. The DLBCL cohort and the FL cohort, and I'm -- I think you mentioned that the FL cohort is likely to be delayed or unblinded later this year and that's the company's choice. It is not like we're waiting for events, right? The decision is when you guys make that decision to pull the trigger. Is that the same thing with DLBCL? And do we expect a similar timeline?

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [18]

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Yes, so diffuse large B cell has been for at least almost 1 year now, I'd say? At least 9 months has been deprioritized, given our feeling about the unknowns in the diffuse large B cell markets. So that data is maturing, but in terms of corporate resources to analyze that data, there is a lot there and kind of excited at some point to dig into it. Unfortunately, we just don't have the resources to dig in today. So at some point, again as we get closer to the end of the year, we'll see what we have in front of us. Again if we have CLL, all focus will be on CLL. If we don't have CLL, the focus will turn to our follicular, and then to diffuse large B cell.

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Operator [19]

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Our next question today is coming from Ed White from H.C. Wainwright.

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [20]

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Mike, you had mentioned that 1501, 1701 and 1801, one or more of those could move to a pivotal in 2020. I just wanted to see if we can get a little bit more information on that as far as timelines go. When can we expect to see data from each of those trials? And then just on the BTKs, you have 1701, but you also have 1702 and you haven't spoke about that. I was just wondering if that's in development or if that's on the sidelines waiting for you to see what's happening with 1701.

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [21]

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Sure. So, take the easy question first. 1702 is a backup compound to 1701. Right now things are going pretty well with 1701, so I don't think we're moving very aggressively on 1702 at this point.

In terms of data from each of these trials and the potential for a pivotal trial some time in 2020. So look, we're moving along. I think the BTK as it stands today is probably the furthest along, in large part because it got started first and we've seen activity at the first dose level, so it makes it a lot easier. Now we're just around the margins trying to identify what is the optimal dose both as a single agent and also in combination with U2. So I would hope that during the remainder of this year, we will be able to identify a dose that we could take into pivotal trials from both single agent and in combination with U2 for 1701 BTK. Which ideally would put us in a position sometime in 2022 to start a pivotal program with that compound.

Beyond that, the TG-1501 our PD-L1, we have some really good confirmation from the solid tumor studies conducted by Checkpoint that the drug is highly active. The profile looks great. It's a really neat compound in terms of its ability to both engage T cells and NK cells. So it's really the only antibody in that class that has that dual capacity. The Pfizer, Merck KGaA compound also has that capacity, but it also has -- that drug has a bit of a challenge in its short half-life. So the ability of this compound to have a full 2-plus week half-life plus it has the maintenance of its FC domain, which gives it ADCC. So it's really a very unique PD-L1. Again, whether that makes it the best PD-L1 that has ever been created, that's obviously not what we're trying to say. But it's a very unique and it is an interesting PD-L1 and I think the solid tumor data that we've seen just so far, which was recently presented, gives us high level of confidence that we're dealing with an active agent. So we're really at dose right now. We're starting with the dose that they left us in the cell tumor studies at 800 milligrams every 2 weeks.

We're just getting going on heme study, but again it's -- we're in May. 6 to 8 months from now, we should have a pretty good population of patients to understand what's going on and I think that one may be toward the second half if we're going to get in -- if, again. Obviously we need to see the data, we need to see what is going on, but if everything is going well, certainly 2020, second half, late second half to get that into pivotal study is also not out of the question.

And then the bigger wild card is the 1801, the CD47, CD19 bispecific. It's a very novel first in class agent. We have to start very low in the dose escalations, so that's ongoing. I think it's too early for me to assess what the timeline will be there, but obviously super excited to get that going in combination with the rest of our portfolio as soon as we can.

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Operator [22]

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Our next question today is coming from Pete Lawson from SunTrust Robinson Humphrey.

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Peter Richard Lawson, SunTrust Robinson Humphrey, Inc., Research Division - Director [23]

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Just on MS. What's the physician feedback been like, say at AAN, and just can you remind us on the timeline? Is that still potentially a 2021 product?

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [24]

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Yes, so in terms of physician feedback, we had multiple meetings at AAN. We spent pretty much the better portion of a full day with back-to-back meetings with KOLs and also community-based KOLs. It was really, enlightening, great meeting. The excitement for the product is we think -- what we heard was very high. I think there's enthusiasm. I think one might be surprised at the attractiveness of a one-hour infusion, but the folks think it's a big deal. It's not only just a patient convenience factor. The economic effect of freeing up that chair as quickly as possible and the infusion suite cannot be underestimated. So yes, so we had a lot of great feedback and we were again just reaffirms our excitement, enthusiasm for the profile of ublituximab in MS. In terms of timelines, yes, the studies should -- we should start to see data from the studies in mid-2020. Our goal is to have a filing in, this would be a supplemental BLA. If all goes well with our expectations for ublituximab in CLL, so this would be a supplemental BLA and our expectation is try to get that in before the end of 2020, early 2021, with approval in '21.

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Peter Richard Lawson, SunTrust Robinson Humphrey, Inc., Research Division - Director [25]

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And then just on 1501. You have seen differentiation there. Is the benefit here the differentiation or is it just more so the ability to control pricing?

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [26]

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So we won't know until we test it fully. I think there's a few pieces to the puzzle of 1501. One is the differentiation and again, the nice part about PD-L1 is it's a tumor target, right. So PD-L1 sits on the cancer, PD-1 sits on your T cells. All the PD-1s were engineered to remove any ADCC effects so that they would avoid the possibility of actually landing on their own -- on your body's T cells and having the body then kill the T cell, which would destroy the point of hitting it with PD-1. PD-L1, on the other hand, lands on the tumor and engages the T cells while it's sitting on the tumor, but while it's there, it might as well try to kill the tumor itself, right? So we have that FC is open and ready for business. So it has that dual-mechan. So, yes. Will that be a differentiator of significance? We'll only know as we go through the clinical program. But it's also a function of the use of PD-1s and PD-L1s in liquid tumors to date is relatively limited and the experience broadly is relatively limited, right. So we have approvals in Hodgkin's disease, so push that off to the side just a little bit. You've got an approval in primary mediastinal diffuse large B cell, which is a very rare form of diffuse large B cell, and then after that we've only have -- there's literally a smattering of data available.

So one of -- one part of having 1501 is not just the package pricing later, it's -- you can't really run trials, the trials you want to run without permission from someone else if you don't have your own PD-L1 in heme malignancies. So for us, it's about research flexibility, about building the combinations that we want for best care for patients, exploring them broadly, which is really impossible today if you don't have your own or you don't get an agreement with someone to give you free drug, but that always, always, always comes with strings attached. So again, it's research flexibility. It's possibly learning that the difference is in how this molecule works really make a difference clinically and then it's future package pricing, for sure.

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Peter Richard Lawson, SunTrust Robinson Humphrey, Inc., Research Division - Director [27]

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And just in CLL, MZL is kind of potentially wide open. Who are you thinking about as kind of the potential first adopters in CLL? Is it particular subsets of either patients or the community versus academic? Just kind of -- I'm just trying to work out your game plan.

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [28]

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Yes, so our game plan is relatively straightforward. We see -- we do see the market as being divided between the community and the academic centers. In academic centers, you're going to have a lot more options, particularly with venetoclax being well used and well liked in academic centers. Whereas in the community, venetoclax is much more of a challenge. So we see the community oncology space being dominated by ibrutinib, but again, as we've noted multiple times, ibrutinib is a very good drug, but it's not a perfect drug. And second generation BTKs are honestly only moderately, appear at least from the data we've seen, only moderately better on the tolerability toxicity profile of "BTK toxicities." So you need an alternative to BTK therapy, there's no question. And we think that alternative represents up to almost 40% of the market, probably 20% of patients before they go on ibrutinib would be candidates that are, again, not good candidates for ibrutinib, which would be good candidates for us.

And then on the other side of going on BTK therapy, you're going to get another 20% of the patients that are going to fall off over a year or 2 based on tolerability, not resistance, that'll also be very good candidates for U2 therapy. So we think our cross lines of therapy, we have a really good opportunity at -- anywhere from 20% to 40% market share of a very, very large market. If it's a $10 billion market, we think there's plenty of room for us to add value to patients and then that to us is the foot in the door.

Once you realize that you can get the same outcome using U2 and perhaps you have a better experience with it from a tolerability standpoint, then you start to use it more often first line than you would just in the patients who don't tolerate or are not good candidates for ibrutinib. So we think there's growth built into that, but certainly we think the beginning market is for patients who are not good candidates or who don't tolerate BTK therapy. And we think that's a pretty large portion of the market. Like I said, I think once you move into the academic centers, you're going to find that there's a lot more options and maybe a little more confusion on how the treatment options and cascade will go, but I think U2, ibrutinib-based therapies, venetoclax-based therapies will all be in the mix for frontline therapy even in the academic centers. And ultimately, the academic centers will converge on 2 -- in our opinion, the academic centers will converge on 2 basic, potentially curative first-line treatments, which will be ibrutinib plus venetoclax, potentially plus or minus GAZYVA on the one hand and in patients who are not good candidates for that, because of ibrutinib potential toxicities, they would go on something like a U2 plus venetoclax. And again, both of those treatment options will be potentially curative in a reasonable number of those patients. So the market is moving in the direction both academically and in the community that you need an option that sits right next to BTK's that you can offer to patients when they're not good candidates or don't tolerate BTK therapy.

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Operator [29]

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Our next question today is coming from Matt Kaplan from Ladenburg Thalmann.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [30]

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Just wanted to zero in on marginal zone a little bit more given the relative near-term filing of the NDA. Can you give us a sense in terms of where you are in the preparation for the filing in terms of CMC manufacturing, preclinical tox package? I guess what's the rate limiting step for filing?

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [31]

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So I don't have a current update in my hand, but I know the team is working on all aspects and I've been informed that they feel like they can get it all done by the end of this year. So I think if, assuming that we are -- we come to an agreement with the FDA on what the package looks like, and the timing of follow-up and everything else that's required, the team tells me that they will be ready for end of year filing.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [32]

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Great. And then commercialization plans for marginal zone in the U.S. What are your thoughts there?

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [33]

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Yes, so we hired Adam Waldman from Celgene. He is a unbelievable fantastic commercial person. He has been in this area for quite some time and he is going to help build the most gorgeous commercial team this side of the Mississippi, maybe even both sides of the Mississippi. Obviously, this is being taped, so obviously a little bit of an exaggeration, I'm sure he is going to -- he will create a great team. But yes, the plan is to build a really top notch commercial organization. We think that there's a lot of great talent available in the marketplace to join us. We've got a lot of inbound interest from folks who are following what we're doing and like what's going on. So I think we can and will be able to put together a really talented team to commercialize umbralisib and U2.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [34]

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And last question. I guess with the number of medical conferences coming up, ASCO, EHA, ICML. What type of presence will you have there? Are you going to have any presentations at those upcoming conferences?

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [35]

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Yes, so we have several oral presentations in Lugano, we have an oral presentation at ASCO, and we have just a poster presentation at EHA.

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Operator [36]

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We reached the end of our question and answer session. I would like to turn the floor back over to Mr. Weiss for any further or closing comments.

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Michael S. Weiss, TG Therapeutics, Inc. - Executive Chairman, CEO & President [37]

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Great, thank you, and again, thanks, everyone, for joining us today.

As I wrap up the call, let me just review some of the key goals and objectives for the remainder of 2019. I think we've talked quite a bit about these in the Q&A and in the prepared remarks. But first and foremost, of course, we'd like to have a nice meeting with the FDA to discuss our filing for MZL and hopefully following that, we will be able to provide the clarity that we'd like to give to investors on the regulatory path for marginal zone and again the goal is to, if all goes well, to get that filing in by year-end. Additionally, we are looking forward to presenting the final MZL data by year-end, hopefully at a major conference.

Next of importance, of course, is getting to that top line progression-free survival data for Unity CLL. Again, hopefully we will have that data available to us by the end of the year. And again, the goal is for that to support approval of U2 in combination for all lines of CLL, both treatment naive and relapsed refractory.

Beyond the key events, we will have multiple data presentations across the year as we just talked about, both on single agent and combination. We've got the summer conferences coming up, ASCO, EHA, Lugano. Also this summer, there's EAN, where we will present additional MS data. And then we'll have an opportunity toward the end of the year, we will have ECTRIMS where hopefully we will present more MS data. And at ASH we are hopeful we will presenting a lot of exciting data on both umbralisib, as single agent, as well as some of the newer compounds and combinations.

So on behalf of all of us here at TG Therapeutics, I would like to thank, of course, our investigators and their patients, who continue to participate in our trials and help move science along. And of course, our shareholders for their support and our employees who work hard every day to make it all happen. Thanks again everyone for joining us and have a great day.

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Operator [38]

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Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.