TG Therapeutics, Inc. (TGTX) Earnings Call Transcript & Summary

Good morning, everyone. My name is Ankit Agarwal. I'm an associate with the investment banking group here at JPMorgan. It's my pleasure to introduce our next speaker, Mr. Michael Weiss, CEO of TG Therapeutics.

Great. Thank you so much for that lovely introduction. Thanks, JPMorgan for having us again, Thursday morning. It's our favorite slot. And thanks, everyone, who got up early on Thursday morning to join us. So let me just get going here. Let's see if I got this. I've received very clear instructions on how to use this machine. So before I get started, let me just mention, I will be making some forward-looking statements. For those of you who are interested, I do encourage you to look at our public disclosure documents available on the Internet, worldwide web. So just by the way of background, we founded the company about 8 years ago with one goal in mind: to create the best possible treatment options for patients with B-cell diseases. We are focused in cancer and autoimmune diseases, with registration programs in chronic lymphocytic leukemia, marginal zone lymphoma, follicular lymphoma and multiple sclerosis. So we've been pretty busy. If you look at TG by the numbers, we now have 125 employees in 4 offices. We have 5 compounds under development, under clinical development. We'll talk about those momentarily. We've conducted 35 clinical trials. So we've been extremely active in evaluating our compounds, of which 5 are registration-directed or Phase III. And of course, we have one goal, is to provide these best outcomes or cures for patients with B-cell diseases. To do that, you need a B-cell-focused platform and you need a portfolio of compounds. One drug will never be enough, particularly in this disease area, for a cure. So the idea is to bring together as many of these mechanisms as possible. Umbralisib is our PI3K delta, CK1 epsilon inhibitor, very novel, very unique compound. We'll talk quite a bit about that drug today. We put that alone and in combination with ublituximab, our glycoengineered anti-CD20 monoclonal antibody. That, too, is in combination with umbralisib. It's also being used alone in multiple sclerosis. Again, we'll talk about those programs. We have 3 additional drugs in the clinic. We have our anti-PD-L1, which I affectionately refer to as [ COSI ]. We have our BTK inhibitor, and we have our anti-CD-47 CD19 bispecific. At the end of the talk on the cancer side before I rotate to MS, I'll talk a little bit about that pipeline and what it could mean in the future. So without further ado, I'm sure everyone saw the news this morning, super exciting for everyone at the company. I know everyone's been working super hard to get our first NDA on file. So we started our rolling submission today. As we've been talking about for a while, we've been focused on getting our marginal zone filing in around year-end. So we did get it in, but we were also super excited to receive guidance from the FDA that we can include follicular lymphoma, which read out just a top line data at the very end of the year. We got some really nice and quick guidance from the FDA, which is amazing, that we're able to -- permitted to include the follicular with the marginal zone. So that will be a dual filing for both indications. So like I said, very, very exciting day for everyone at the company. That tees us up for what we think is a really transformational year from a very active clinical development company, 35 clinical trials, 5 registration trials, to a company that will continue to drive our R&D and our research platform, but focusing soon as well on the commercial side. We have our UNITY-NHL, so that's the marginal and follicular. Like I said, that application is in. We're targeting completion of the rolling submission in the first half of this year. That will quickly be followed by the data from our UNITY-CLL program. So we are still on track for data this quarter. So everyone is very excited for the company for that outcome. We feel like that's going to be a real nice additional application for us. So again, target is still Q1 2020, so we're getting very close. And then that will be fast followed by our results from our MS trial, which will come in the second half of the year. Again, talk more about the program, but it's a large MS program designed for the approval of our CD20 across all forms of relapsing MS. So with those large pivotal programs and data sets and filings now started, we see the potential for approvals across marginal zone, follicular, CLL, SLL and MS from 2020 to 2022. We think it's one of the most robust programs of approvals certainly for any company in biotech. And I think in terms of novel agents, could compete with some of the larger companies in terms of what they have on tap for approvals over the next several years. Our commercial preparations are underway. Again, our hope is that potentially before the end of this year, we could be on the market. If that's the case, we'll be ready. We've brought in a great Head of Commercial from Celgene around their hem franchise in the U.S. or globally, both, everything -- ran everything over there, I think. He has just ran a whole company, I think, at one point. But great guy. He's come in and he's brought in an unbelievable team of folks, a number of them also from Celgene and from other companies. So the core leadership of our commercial team is in place and then we're going to start to build out the remainder of that team over the next quarter or 2. So let's cover some background on umbralisib. So this is a next-generation dual inhibitor of PI3K delta and CK1 Epsilon. So it's a very novel agent. It's a once-a-day oral pill that's demonstrated activity across non-Hodgkin's lymphoma. Again, we've announced positive pivotal data for follicular and marginal zone. Soon to come will be CLL. We have preliminary data in CLL which I think is quite compelling as well. And we think, again, this drug, because of its novel mechanism and the highly targeted nature of this compound, that it would have an improved tolerability profile over first generation PI3K delta inhibitors, and like I mentioned, the convenience of once-daily dosing. So our lead indication has been and will continue to be, right now, our marginal zone. So we've presented some preliminary data at multiple conferences. We've updated this data a few times. But net-net, the marginal zone cohort, it's about a 50% overall response rate, with about 20% of those patients achieving complete responses. The other compound that's approved for marginal zone as a single agent small molecule is ibrutinib. They had about a 40% -- 45% overall response rate with 1% or 2% CR rate. So this certainly compares very favorably. And on a tolerability safety profile, the drug appeared to be well-tolerated. And the key is really just AE is leading to discontinuation. If you can't stay on these drugs, you can't derive benefit. And so it continued to be very low rates in the -- under 15% of the patients would come off, and that's quite consistent with most TKIs that you see as a general matter. So really very happy with the current profile. At some point later this year, we'll be presenting this data along with, at some point, the follicular data. Again, we did just announce later in the year that the follicular cohort met the primary endpoint for that cohort, and as we've now said, probably 2 or 3x, we did receive guidance from the FDA that we could include the follicular cohort with the marginal zone cohort in the current rolling submission that we just filed and announced this morning. So again, for us, that was a real excitement to be able to put those together. So when we look at now marginal zone and follicular together, those are the 2 largest forms of indolent non-Hodgkin's lymphoma. So together, you have about 20,000 to 25,000 new cases per year. That's about the same size as CLL. So collectively, marginal and follicular, in terms of new cases, is around the same as CLL. So it's a big market, and a lot of these patients will come back into the system and we estimate about 6,000 to 10,000 will come back in for new treatment every year. And we think that, one, based on what's available, there's a need for new treatment options, both across marginal and follicular, and then umbralisib can really fit that unmet medical need. Rotating to ublituximab, so this is our novel glycoengineered anti-CD20 monoclonal antibody. So we've been talking about umbralisib as a single agent on the lymphoma side and we don't talk about it here, but eventually, you're going to see ublituximab review, too, on the lymphoma side, because that works quite well, too. But we started out with the combination in chronic lymphocytic leukemia. That's our big UNITY-CLL trial. I'll discuss that on the next slide. But -- so as a combination, we have ublituximab and CLL. Ultimately, we'll have ublituximab as a combination in non-Hodgkin's lymphoma. But we also have ublituximab as a single agent in the treatment of multiple sclerosis, and we'll talk about that program in detail. So again, this is a glycoengineered anti-CD20 monoclonal antibody. I don't think people fully appreciate it. They kind of always think about it secondarily to umbralisib. But this is a very potent anti-CD20 monoclonal antibody, 50 to 100x more potent than first generation CD20s. We've seen activity for this compound in rituximab refractory patients. And this drug also comes with a really nice convenience advantage. So on the cancer side, we deliver this drug in CLL patients in 90 minutes. That's compared to Rituxan and GAZYVA, which are closer to 3 to 4 hours. So really nice convenience advantage there. And then on the MS side, similarly, we give this drug in a 1-hour infusion versus OCREVUS, which is given in a 3- to 4-hour infusion. So again, very nice convenience with a very high potency compound. So let's talk a little bit about our CLL and our data that is coming soon. So everyone is always asking, why do you think CLL's going to work? Why do you think CLLs work? Well besides the fact that we know the drug works in CLL, we've presented multiple data sets over the years, I just grabbed a few quick recent data sets that we've presented. So at ASH of this year, we presented that as part of our U2 plus venetoclax Phase I trial, the way that study was set up, you did 3 months of U2 alone before you got venetoclax. There was just U2 for 3 months, and then they introduced the venetoclax for another 9 months. In those first 3 months that they've got U2, 87% of patients with a relapsed/refractory CLL responded to the drug before the introduction of venetoclax. So again, very consistent with other data sets we've seen over the years, our Phase I, with the combination also most of the patients responding. And it's hard to characterize the exact percentage, but most patients will respond with relapsed CLL to U2. The primary endpoint for the UNITY-CLL trial is progression-free survival. In that context, we do have some data, some recent and some old data giving us a sense. We haven't -- I wouldn't say we've fully characterized the PFS of this combination. Certainly, when the UNITY-CLL trial is done, we'll have, in my opinion, fully characterized it with 420 patients in the 2 main arms. But in the data that we do have, in 2 separate data sets are Phase I. And also, last year, we presented data on a very tough to treat population. So these are patients with -- who are on a BTK inhibitor. They came off for intolerance. Some of them were relapsed, some of them were refractory to BTK. So tough population. And in that group as a single agent, umbralisib had about a 24-month PFS. And in the Phase I, it also came out to about a 24-month PFS for umbralisib as a single agent. In the Phase I U2, the combination came out to be about 28-month PFS. Again, small numbers, different patients. We've been projecting for quite some time that our belief is that the PFS in relapsed CLL patients for the U2 combination ought to be somewhere between 24 and 30 months. That's in contrast to what one might expect for chemo immunotherapy in relapsed CLL patients, which is probably closer to 12 to 14 months. So again, we do think that we're going to have quite a substantial benefit in the progression-free survival in this trial. And that, as many of you are aware, the trial is about 40% relapsed patients and about 60% frontline patients. But our belief is that the benefits we will see in relapsed patients based on what we know about PFS, will translate into frontline patients. It's pretty typical that with chemoimmunotherapy, that frontline is about double the PFS of relapsed patients. And similarly, we'd expect that our PFS will comfortably, in the drug arm, be greater than the relapsed patients in a proportional way. So again, UNITY-CLL, the excitement here for us is that this trial was conducted in both frontline and relapsed/refractory patients. So in theory, if this is successful, obviously, we believe it will be, we would expect that the label would say for the treatment of CLL. It would be the only doublet to be approved across all of CLL. So there's no other doublet that someone could just grab off the shelf and use for any application in CLL except for U2, again, assuming success on the trial and then further success with the FDA. So it's a big one for us. For that reason, again, reiterating our expectation is for data this quarter. And as I kind of alluded to earlier, CLL is a large market of patients, about 115,000 Americans are currently living with CLL, and we estimate about 20,000 newly diagnosed patients and a similar about 20,000 patients will come in, in each year, seeking treatment in the relapsed setting. So lots of patients in need of treatment. And the expectation is that this could grow to be a $10 billion market over the next several years. We see U2 as having a tremendous potential to treat unmet medical needs still in CLL. So again, there's been a few new treatment options, but with new treatment options, creates new unmet medical needs. There's over 60,000 patients that have been treated with a BTK inhibitor in the U.S. I think it's over 150,000 globally. At some point over the next 10 years, most of those patients will come off therapy. They'll come off for tolerability reasons. They'll come off because the drug will stop working for them. They'll come off for convenience, whatever it is, and then they're going to come looking for a new treatment. And those patients, we think, U2 represents a really exciting new potential treatment option. In addition, about 20% of the patients who walk into their oncologist's office wanting to get a BTK inhibitor are not great candidates for that drug. They either have some pre-existing cardiovascular risk. They have some potential bleeding risk. They might have some preexisting infection or a fungal infection. So in those cases, we think it's almost 20% of the patients, they walk in wanting ibrutinib, they're not really good candidates for that drug, and we think a lot of those patients will then be put on to U2 as a really interesting potential alternative for them. In addition, in addition, if they do go on BTK therapy, in real-world applications, this is a recent study presented by Dr. Anthony Mato, about 40% of patients will discontinue their BTK therapy within a median time of about 17 months. So again, none of these new treatments are cures. They're great treatments, but we need additional alternatives and options for patients who don't tolerate what's available or they do progress. And finally, venetoclax, which a number of you may have heard about, it's also a very interesting, a very good new drug. It works well on its own, but it does work much better in combination, and most applications are using venetoclax in combination. Venetoclax is a very potent drug. And if you are not careful, you can induce tumor lysis syndrome, and that could lead to death. If it's managed appropriately, the drug is quite safe. But to do that is a medical challenge. You need, in a lot of cases, in small community settings, you have to put the patient in the ICU to monitor them to watch. So it is not a drug that has a broad applicability. It's somewhere between a CAR-T and regular infused drugs. It is oral, but it has to be taken in a hospital setting when you first get started. So because of that, it has its limitations. Not everyone has access to it and not everyone wants to have access to it. Not everyone wants to travel to a major hospital to be treated. A lot of folks want to be treated at their local community hospitals or at their doctor's office, and U2, again, provides that kind of option for patients. So we see there's a substantial need for additional, highly active, well-tolerated treatments for CLL. So let me touch on the B-cell platform that we've created and the combinations. So again, our focus is on getting umbralisib approved for follicular, marginal zone, getting U2 approved for CLL, and separately, which we'll talk about momentarily, getting ublituximab approved for MS. But behind the scenes, again, we are a very active development company. We really are focused on building out these combinations. And so we've created a lot of optionality in our portfolio with all these new agents. And in addition to the new agents, as I mentioned earlier, venetoclax does work better with other compounds. We're not unwilling to work with established agents. And venetoclax, we think, is one that's quite interesting for us. So we did present at ASH this year. In my -- I don't think it's my opinion. I think it's what's been published. In relapsed/refractory patients, it was the best data that's ever been published in that setting. Again, it's only the first 12, 15 patients, but if that holds up, that combination, and it's not that, that would be a surprise to anybody, right? The fact that you put U2 with venetoclax and so the best data that's ever presented is not a surprise. Not to me, maybe to others. But -- so that works really well. Again, we're building that data set. Hopefully, by the end of this year, we'll have 90 to 120 patients enrolled in that setting. And that will hopefully lead to, at some point, a registration for that combination. Internally, we are extremely excited about the combination of U2 plus our BTK inhibitor. We've shown at the bottom of the slide, on the right-hand side, the combination of U2 with ibrutinib looked quite good across CLL, marginal zone, mantle cell, follicular, nearly 100% response rates across all those indications. And then we started our combination with our own BTK inhibitor. And at the lowest dose, I think we had 3 or 4 patients at the lowest dose tested, and all of those patients with follicular marginal responded as well. So very consistent with what we had seen with ibrutinib. But now we get to do it with our own internal pipeline of drugs. And that has pricing advantages, that has convenience advantages later on. And so we think we could do a lot across not just CLL with the triple combination of U2 plus our BTK, but certainly, marginal and follicular. So with that, let's talk about MS, which again, is probably the largest of our programs. There's probably about 1 million Americans living with MS. We've completed Phase II data that's been presented at multiple conferences. I encourage you, we have presentations on our website, we actually have over 100 presentations on our website in a beautifully designed library, I encourage everyone who is interested to go to the website and read every paper if they can get through 100 papers or more. Good luck. We have a fully enrolled Phase III trials. It's the ULTIMATE -- we call it the ULTIMATE I and II, and 1,100 patients, ublituximab versus standard of care. In this case, it's teriflunomide. And we are -- the nice part about this trial is it's time-based. So 96 weeks, patients come out, study's over. So that should occur in the second half of this year. The early data looks quite encouraging. This is not a head-to-head trial. In blue, you have the standard of care in their Phase II trial. In green, you have ublituximab in its Phase II. I think what we'd like to say from this is that it's clearly looking as good, if not better than standard of care. As we sit today, the Phase III trial will clearly give us more information. In addition to the annualized relapsed rates that I showed on the prior slide, which is the endpoint for the Phase III. In the early trials, it's also nice to see some biological activity. And so here, we're showing the effects on gad-enhancing lesions. This is a telltale sign of MS. Not all patients have it, but the patients who do have it, you could see their scans light up. They have lesions all over the brain. What we can say is that every patient who came into the study with a gad-enhancing lesion left the study without a gad-enhancing lesion, and no patient during the time of the study had a new gad-enhancing lesion occur. So very active. And again, not a surprise. OCREVUS, which is a CD20, is on the market, also has very good, similar types of results. With 1 million patients in the U.S. and global prevalence of 2.3 million, the global market size is estimated to be about $30 billion. The CD20 market alone, which should include 3 members in that class, the CD20 market alone is expected to grow to about $10 billion. So we'll be 1 of 3 in that class. And I like this slide. It's not for the details, it's more of a visual. There's multiple classes of MS drugs. And in multiple classes, there are multiple billion-dollar drugs. There's not, in any of these situations, one clear winner. There's all winners and then not as good winners. But they're all doing quite well and we see the market for CD20s to be similar. So our value proposition in MS, we believe we will have equal to better activity and comparable safety to available therapy. We have the convenience of a 1-hour infusion every 6 months versus 3 to 4 hours for ocrelizumab. We have the ability to strategically price this compound to create patient access which we think is important. And we have estimated, who knows, depending on the market share, but it's a very large opportunity for us. So just to finalize here with the targeted data and potential filing approvals, next up, top line data for UNITY-CLL. After that, we have our BLA filing, NDA filing for UNITY-CLL, top line MS, and ideally, before the end of the year, the approval. And with my remaining negative seconds. I'll just leave you with our financial slide. So I thank everyone for your time and attention.

We have a breakout session in the Victorian room. If you go right down the hall on the left, you'll find the room. Thanks.