TG Therapeutics, Inc. (NASDAQ:TGTX) Q4 2023 Earnings Call Transcript
TG Therapeutics, Inc. (NASDAQ:TGTX) Q4 2023 Earnings Call Transcript February 28, 2024
TG Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.1, expectations were $-0.12. 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 Fourth Quarter and Year-End 2023 Financial Results and Business Update Call. At this time, all participants are on 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. Please go ahead.
Jenna Bosco : Thank you. Welcome, everyone, and thanks for joining us this morning. I'm Jenna Bosco, and with me today to discuss the fourth quarter and year-end 2023 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 developments, 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 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 filing. 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 statement.
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. Now, I'd like to turn the call over to Mike Weiss, our CEO.
Michael Weiss : Thanks, Jenna, and good morning everyone. Thanks for joining us on today's call. 2023 was a transformational year for TG. We kicked off the year with the launch of BRIUMVI for relapsing forms of multiple sclerosis toward the end of January and saw a nice sales momentum carried throughout the year, resulting in approximately $90 million in U.S. BRIUMVI net revenue for our first partial year of sales. We believe these first-year revenues speak to the high level of early interest and strong underlying demand for BRIUMVI, and we look forward to continued carry-through in 2024, where we are targeting $220 million to $260 million in U.S. sales revenue. The feedback from physicians, patients, nurses and infusion centers continues to be very positive, and drives our confidence in both the short-term revenue ramp, as well as the long-term blockbuster potential of BRIUMVI.
Our team remains focused on our ultimate goal of becoming the number one prescribed CD20 by dynamic market share perspective, and the early uptake supports our belief that that is possible. Having said that, this is a competitive market and BRIUMVI is the newest entry, so differentiation matters. One obvious difference is that BRIUMVI is the only anti-CD20 monoclonal antibody that can be given as a one-hour infusion every six months after the starting dose, which may be an attractive profile for both patients who want to get back to their daily lives and for healthcare practices seeking to increase the efficiency within their infusion suites. Beyond the one-hour infusion, we are excited to continue to explore biological-based differences that may not be as readily apparent, but are perhaps clinically relevant.
As a reminder, BRIUMVI is differentiated by design, having been glycoengineered for enhanced immune effector cell engagement and efficient B-cell depletion. 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 for these types of drugs found on B-cells, and through its glycoengineering has the ability to induce the highest level of antibody-dependent cellular cytotoxicity regardless of patient-specific polymorphisms. Whether or not these biological attributes of BRIUMVI have clinical relevance in patients with MS has not yet been determined, as no head-to-head trials have been conducted for BRIUMVI versus the other anti-CD20s. However, what has been well established is that BRIUMVI is the only anti-CD20 monoclonal antibody to achieve an annualized relapse rate of less than 0.1 in Phase 3 trials.
Also, in clinical trials, BRIUMVI rapidly depleted B-cells with a median of 96% reduction within 24 hours and 95% on-time infusion completion rate, which we believe speaks to the tolerability profile of BRIUMVI. As we move forward, we are eager to explore to what degree the design attributes of BRIUMVI may be contributing to the robust activity scene. We plan to do more work to evaluate some of these unique attributes and to understand whether the molecular and non-clinical differentiation translates into clinical differences. And we look forward to sharing more on that when available. I also wanted to highlight another recent exciting development. We were pleased to share yesterday that in addition to our current BRIUMVI patent and U.S. Biologics exclusivity, the U.S. Patent and Trademark Office recently issued three additional patents for BRIUMVI, including a composition of matter, patent related to the glycoengineered attributes of BRIUMVI.
With these additional patents, our patent protection now extends through 2042, providing us a nice long runway to continue to explore the full potential of BRIUMVI, including expanding the potential reach of BRIUMVI in MS, as well as into other autoimmune diseases, which is a good segue to discuss what is next for BRIUMVI and TG. First, let me say that the U.S. BRIUMVI launch and commercialization is and will remain our highest priority. That said, our drug development team is poised and ready to potentially drive additional value through BRIUMVI lifecycle management activities, as well as new drug development. More specifically, we are focused in four key areas. First, in making IV BRIUMVI even more convenient. Last year, we presented the first data from the enhanced Phase 3b trial, of which the goal is to evaluate the safety and efficacy of eliminating the four-hour BRIUMVI 150 milligram starting dose for patients who are switching from a prior CD20 and have a pre-specified low level of B-cells.
Early safety data from this study is encouraging, and we look forward to presenting additional safety and efficacy data this year, including at the ECTRIMS Conference, which is happening later this week. A second key area for us is developing subcu BRIUMVI. We have completed our preliminary subcu formulation and are preparing to enter human bioequivalent studies this year. We believe this subcu market could represent a significant new market opportunity for us, as the IV and subcu CD20 markets within RMS are rather distinct. Given the known profile of the currently available subcu and the profile of the other one under development, we believe there is plenty of room to strive to develop a potentially best-in-class subcu CD20 product. Third, we are looking forward to expanding BRIUMVI beyond MS.
There are multiple other disease indications where CD20s have proven to have utility. We look forward to launching our first autoimmune trial outside of MS this year. And fourth and finally, we are focused on new drug development and are extremely excited by our recent portfolio expansion. Last month, we entered into a partnership with Precision BioSciences to acquire a worldwide license to Precisions azer-cel, allogeneic CD19 CAR T cell therapy program 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. As an allogeneic off-the-shelf product, we think azer-cel may offer benefits over autologous CAR T treatments.
Overall, we believe azer-cel is a great fit for us and an important addition to our current pipeline. Azer-cel has been used to treat over 80 cancer patients and we look forward to hopefully treating the first autoimmune patients with azer-cel as soon as possible with an IND filing targeted for mid-year. As you can see, we have put together a thoughtful and exciting development plan for 2024 and beyond that we believe can add significant value to our shareholders. We have been and will continue to be measured in our approach to R&D from a capital allocation perspective, included in our approximately $250 million and projected 2024 operating budget of the dollars required to expand our BRIUMVI field teams, increase our marketing spend, as well as moving forward, all of the current development plans we've just discussed.
With that, as I bring my prepared remarks to a close, I'd like to say how incredibly proud I am of the team and the progress we've made in 2023. We built a top-notch MS-focused commercial team that enabled us to rapidly integrate TG and BRIUMVI into the MS ecosystem. We will continue to build upon this foundation with TG as a trusted partner to the MS community as we strive to serve the patients we treat to the best of our ability. Finally, I also want to congratulate our ex-U.S. partner Neuraxpharm on the official launch of BRIUMVI in Europe, which took place this week in Germany. We look forward to hearing more about their progress as they endeavor to commercialize BRIUMVI in Europe and the rest of the world. With that, let me hand the call over to Adam Waldman, our Chief Commercialization Officer, to provide a detailed update of the BRIUMVI US commercial launch.
Adam?
Adam Waldman: Thank you, Mike, and good morning everyone. I'm pleased to share with you the results from the fourth quarter and cover the highlights from our BRIUMVI commercial launch performance in 2023. Launching BRIUMVI last year was a transformational event for our company. We've built a strong commercial infrastructure that delivered exceptional results, exceeded expectations on the launch, and now provides a solid platform for which to build potential blockbuster products in MS and capitalize on other autoimmune disease opportunities going forward. And more importantly, we made a positive difference in the lives of thousands of people living with MS. As reported at the JP Morgan Conference last month, fourth quarter net sales for BRIUMVI were $39.9 million, representing 60% growth quarter-over-quarter and bringing our full year 2023 revenues in at $89 million.
The fourth quarter number exceeded our guidance and reflects the growing demand we are seeing for BRIUMVI. We saw an increasing number of repeat prescribers and incremental gains in new prescribers and new centers adopting BRIUMVI. We also started seeing increasing prescribing from major academic centers in the fourth quarter as the logistical barriers at these centers continue to decrease. In fact, the fourth quarter was the first time we saw more scripts from academic centers than in a private practice setting, which we view as positive progress given that 60% to 65% of patients are being seen by MS specialists in the academic setting, and this has been a focus for our team as we headed into the end of the year. Overall, in 2023 we saw approximately 3,200 new patient prescriptions come through our hub, which we believe translates into about 3,500 total new patient scripts as not all new prescriptions will come into our hub.
We're also pleased to see a wide distribution of use with new prescriptions coming from over 400 centers and 640 unique prescribers. Encouragingly, we also saw a diverse mix of patient types, including those that were naive to all treatments and those that were previously treated and switched from both non-CD20 and CD20 agents. This mix of patient types remained fairly consistent throughout the year, with the largest group consisting of patients that were previously treated, but naive to anti-CD20 therapy. We were also highly encouraged by the persistence of returning patients, which so far appears to be consistent with our assumptions, which was based on what had been seen with the other IV anti-CD20 on the market. From an execution perspective, our team’s did an exceptional job delivering on our launch plan in 2023.
We had a well-designed and targeted launch strategy, efficiently focusing our resources on driving adoption at high-volume, targeted accounts where we saw the vast majority of our business. At this point, approximately 90% of the top 100 centers in the U.S. have utilized BRIUMVI. And with the lowest price of any branded medicine for MS, we prioritized gaining early access and coverage, and were able to achieve coverage for 95% of commercial and Medicare lives within the first nine months of launch. We built a best-in-class patient support team, and our highly experienced and well-networked field teams have done an incredible job establishing TG as a respected partner in the MS community. We are very proud of our teams and believe their outstanding efforts are contributing to the positive experience with BRIUMVI and continue to build confidence in our organization.
The cumulative effects of what we've accomplished certainly helped to drive momentum that we saw in 2023, and we expect to see that momentum carry forward this year. Looking forward, we see the CD20 market continuing to grow. This class of drugs has transformed the way that MS is treated over the last five years, with the CD20 share continuing to grow and now capturing approximately 50% to 55% share of new patients every year. And we would expect that that will expand even further going forward. We believe this is a continued tailwind for our business. We also expect that most patients and centers will continue to prefer an every six-month IV dosing schedule, where patients don't have to think about their disease every day or every month, and providers have the confidence that their patients are being compliant receiving their medication.
We estimate there are approximately 40,000 patients going on a CD20 therapy each year, or about 10,000 patients per quarter. And in the fourth quarter of 2023, we had approximately 1,000 prescriptions come into the TG Hub, which would reflect approximately a 10% market share if all these patients were infused. Since not all these patients prescribed BRIUMVI will actually be infused, these prescriptions through the Hub will not translate precisely in to market share. But nevertheless, we do believe this is an indicator of strong early demand for BRIUMVI, especially in our first year of launch. We also believe we have significant room to grow in what is a large and growing and expanding market. Based on our market research and extensive interaction with neurologists, we continue to believe BRIUMVI's profile remains very compelling and will eventually be the IV therapy of choice in the relapsing MS market.
This will of course take us time to achieve, but that's very much what we're focused on doing. In 2024 we'll expand our targets and continue to work on educating our customers on the BRIUMVI difference. We'll also continue to ramp up our efforts to increase patient awareness, which we believe can be an important driver in this market. So far this year is off to a really strong start, where we have seen record enrollments into our Hub in January. And we believe we are tracking towards the upper end of our first quarter guidance range of $41 million to $46 million, and potentially higher if demand trends persist over the next month. We also feel very good about our full year guidance of $220 million to $260 million, which we provided at JP Morgan.
We certainly have 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 Power : Thank you, Adam, and thanks again to everyone for joining us. Earlier this morning we reported our detailed fourth quarter and full year 2023 financial results, which can be viewed on the investors and media section of our website. This morning, I'll start with a discussion of our revenue for the fourth quarter and full year of 2023. As previously mentioned, we are pleased to report U.S. BRIUMVI net product revenue of $39.9 million during the fourth quarter. Also included in our total net product revenue for the fourth quarter is approximately $3.2 million of revenue for products sold to Neuraxpharm in support of the ex-U.S. commercial launch, and $800,000 of other revenue, taking total revenue for the fourth quarter to approximately $44 million as reported.
For the full year, we reported total revenue of approximately $234 million, which is predominantly comprised of $88.8 million in U.S. BRIUMVI net product sales, $140 million in license revenue stemming from the upfront payment for our ex-U.S. commercialization agreement with Neuraxpharm, and $3.2 million in product revenue for products sold to Neuraxpharm, as previously mentioned. Our OpEx during the fourth quarter and full year has remained well controlled and in line with previously discussed ranges. For the fourth quarter and full year 2023, our operating expenses were $56 million and $213 million respectively, which includes COGS of $7.8 million and $14.1 million in the respective periods. When excluding on cash compensation, our cash operating expenditures during the fourth quarter and full year 2023 were approximately $47 million and $175 million respectively.
On the back of the reported revenues and well-controlled OpEx, we were able to report net income of $12.7 million or $0.09 per diluted share during the full year of 2023. For the fourth quarter of 2023, we reported a net loss of $14.4 million or $0.09 per diluted share. And finally, from a cash standpoint, we ended the year with approximately $217.5 million in cash, cash equivalents and investment security. And 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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