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

Hello, everyone, and thank you for joining the 23rd Annual H.C. Wainwright Global Investment Conference. My name is Ed White, and I'm a senior analyst here at H.C. Wainwright. While we are virtual again this year, we're confident we're going to be able to provide value to you with over 850 companies presenting at this conference as well as via your interactions through one-on-one meetings. H.C. Wainwright is a full-service investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private companies across multiple sectors and regions. We all have a total of 19 publishing senior analysts and over 560 companies covered across all sectors. From a logistics standpoint, please make sure to reference your virtual conference online portal that provides your individual links to your meetings in all presentations. Please join us for corporate presentations and panels that will be available live and streaming on September 13 to the 15. With that said, it is my pleasure to host this chat with Mike Weiss, CEO of TG Therapeutics, ticker TGTX. TG is commercial-stage biopharmaceutical company focused on the development and commercialization of novel treatments for B-cell malignancies in autoimmune diseases. On February 5 this year, the FDA approved UKONIQ for the treatment of adult patients with relapsed/refractory marginal zone lymphoma, who have received at least 1 prior anti-CD20 based regimen in adult patients with relapsed/refractory follicular lymphoma who have received at least 3 prior lines of systemic therapy. Thanks for joining me today, Mike.

[indiscernible] you said that was quite a mouthful, but I like the intro. Thank you.

Sure, it was.

All right. Well, let's start by talking about UKONIQ. As I mentioned, the drug received accelerated approval on February 5, and that was before the PDUFA date. So congratulations on that. And you launched it shortly thereafter. Can you tell us a bit about how this once daily oral PI3K-delta inhibitor is differentiated from its competitors and how the launch is progressing so far? If you conclude any comments on payer coverage or physician education acceptance and maybe even if you can go into how the splitted uptake has been split between the academic and community settings.

Yes. Sure. So let me start at the end of that and we'll work backwards. It feels like one of your questions from the conference calls where it's like an 8-part question. But I'll try to remember all of it and if I don't...

I will remind you.

Remind me of what I missed. So yes, the UKONIQ launch is going well. In terms of just the last part of the question about the split between community and academics. I think it's about evenly split right now, give or take. So we've seen some nice uptake. And you would expect that the academics, even though they have a smaller portion of the overall market, are going to be the -- they're much more concentrated and easier in some ways to get to early on. But the community has been really quite good for us so far. And we're seeing really nice uptick with the clinical investigators, which is something we really like to see. In terms of the overall launch, like I said, things are going quite well. I think Adam spoke about it a little bit on the conference call. It's apparently not easy to get into offices during COVID times. There was a nice window, I think, in the May-ish time frame, like late April, May, into early June, where things seem to open up a little bit. And then most sites have reinstituted basically bans on outside visitors. So it does make it more challenging. There's a lot of Zoom fatigue. I've said it before, I love Zoom, if I could live my life on Zoom, I'd be pretty happy. But apparently, the docs are getting a little bit exhausted of Zoom interactions. So I think in terms of what one might hope to achieve in terms of physician engagement in a non-pandemic environment were certainly probably less. But I think in terms of relative to what others have faced, I think the team has done an amazing job in engaging more zoned follicular, particularly late lines and follicular, we're sitting on margins on generally, these are pretty small indications, right? You're dealing with sites -- community sites that have 1s and 2s really spread out across the country. 1s and 2s in a given year. So we just got to continue to make sure that our reps are there and when patients are coming in, they're identified and put on to UKONIQ. The feedback has been great. We've done a lot of advisory boards, getting a lot of good feedback. We don't see a lot of resistance. I feel like it's -- the differentiation between UKONIQ and prior generations of PI3Ks is now very well established. I don't think -- we just show the data and people can see the difference. And really probably the big one is associated with dropouts -- overall dropouts due to AEs, right? That's sort of like an overriding test of how well the drug is being tolerated. And typically, we see, give or take, about 15% of the patients will drop out due to AEs, which is pretty good. It's in line with most TKIs. And so I think the physicians recognize that and they recognize that prior generations have 35% to 50% drop out due to AEs. So just a different tumor profile. So yes, so all is going well, and we're out there. The team is out there doing their thing.

Great. And maybe you could just touch on the payer coverage and how that's progressing? And maybe talk a bit about the impact of free drug sales so far, I think they were a little bit higher than we had expected to see when you announced the results. And how do you see that going forward?

Yes. So that's an area that I personally was quite a bit unfamiliar with just getting my hands around it. So the payer coverage has been great. I think we're at 95-plus percent payer coverage. So getting insurance to reimburse on label is not a problem. The problem is that most of these patients are on Medicare. And on Medicare, they're responsible for not only the donut hole, which is a few thousand dollars, but 5% of the total cost of the drug, right? So for every $100,000 of drug costs, the patient pays $5,000 themselves, so -- which is not inconsequential for most folks. So even though they're covered, they're not covered for 100%, right? And so the free drug comes about because they're covered but can't afford their co-pay. Now there's private pay insurance where companies can actually -- so where TG could say to the patient, oh, you have to pay that $5,000. Don't worry, we'll give you a credit card, basically that says you can pay the co-pay with this, right? And if they're a private bank. The rules of Medicare set by the federal government say, no, no, no, you can't pay the co-pay. If they can't afford it, you don't get to just pay the co-pay, you've got to give it to them for free. So most patients -- elderly patients that have follicular marginal zone are on Medicare and thus, are -- were prohibited -- all companies are prohibited from providing co-pay support. That support is only available through charitable foundations and charitable foundation support is based on giving of individuals and corporations. And when it's available, they'll cover the co-pay. When it's not -- when the money is not there, they will not. So in margin zone follicular, there's not a lot of charitable foundation support for co-pays. Therefore, anyone who can afford it, their co-pay portion, we will give them free drug. So in the end, it's a -- payer coverage is almost complete. But unfortunately, we're seeing a lot of patients who can't afford their co-pays and otherwise, there's no other support for them other than free drug.

Okay. Thanks, Mike. And when thinking about the launch in MCL and in follicular as you mentioned, they are small indications. But how does the launch set this foundation for multiple potential future approvals including the combination of UKONIQ and Ublituximab, which you call U2 in CLL?

Yes. So about 85% of the physicians that we will engage to discuss UKONIQ for follicular margin zone will be the same folks who would prescribe U2 for CLL. So the overlap is tremendous. So it's a very -- I mean, which also translates to -- we only need one sales force for all 3 indications. And so assuming all goes well and we have a U2 approval in CLL, we really don't need to change much. We're going to add a few places into the sales program. But yes, everything we're doing now for margin zone follicular, both infrastructure, personnel and engagement, all will be leverageable for CLL, right? Same people will be going to talk to the same people about the label once it's hopefully available. So yes, so we've always said, I mean, Ed, you and I have had personal conversations about this. I've never been too focused on what kind of revenues we could generate for margin zone and follicular in the first year. It was more about can we get out there, educate as many people as possible on UKONIQ as UKONIQ so that when we get to CLL, we can flip the switch and start talking about the combination of U2 for CLL. For the moment, obviously, it's all focused on getting folks comfortable with the profile of UKONIQ, getting them ideally to try UKONIQ if they see a marginal and follicular patient and hopefully they will. And I think we're doing quite well in terms of the penetration into that market. We think we're probably 3-, 4-ish plus percent market penetration already, which is, to me, pretty darn good. So we get as many people to try it. If they don't try it, at least we're getting out there and we're able to discuss with them UKONIQ and they can understand that it's different. So when they -- when we start to talk about CLL, and they have a lot more patients they'll be fully comfortable with the profile, and they can give it a try for CLL.

Okay. And as we're just talking about Ublituximab, that's your glycoengineered anti-CD20 monoclonal antibody. The FDA has accepted the BLA and the sNDA for U2 for patients with CLL and SLL with a PDUFA date of March 25. Maybe you can just review for us the Phase III UNITY-CLL trial data that was the basis for the FDA submission. And talk to us about where you're going to think it's going to be utilized? And how it will be utilized in the first and second lines of CLL?

Yes. So the Phase III data for UNITY-CLL. Well, the data that we submit is based on the Phase III study, UNITY-CLL. That study enrolled both frontline and relapsed/refractory patients. And in both cases, we compare to a standard of care chemo immunotherapy. And in this case, it was GAZYVA plus chlorambucil. The data basically showed that the combined cohort, which was the primary endpoint, there was a significant advantage of using U2 over GC. And in each of the subgroups, both the frontline and the relapsed, there was a benefit of using U2 over GC. So we're excited about the data, the profile -- safety profile appears similar to what we've seen previously with the drug. So we're feeling quite good about that. I mean, again, we've said this multiple times it's not the perfect drug, but it's a lot better than the PI3 study from before, and it's generally tolerated by patients. So we're excited about that. The -- where we think U2 will be most used is in a few very specific but important, what we see as unmet medical needs currently in CLL. So -- while we're hoping for a very broad label. We're hoping for a label that essentially says, U2 is for the treatment of CLL. We recognize that most patients with CLL are well served with current therapies. So I say most patients. Now we're talking about a market that's anywhere between 30,000 to 40,000 patients looking for a new treatment each year. There's a lot more patients living with CLL, but those who'll be seeking a new treatment each year are somewhere between 30,000 and 40,000. And like I said, most of those patients will find a good treatment between a BTK or venetoclax. But unfortunately, there are too many folks that will slip through the cracks of those 2 drugs, whether it's -- because they're in a community practice that doesn't yet use venetoclax or they have some cardiovascular risk factors that preclude them from using BTK and then get the intersection of those 2 cohorts. And we think there's probably a good 20% of the total patients seeking new treatment they're really having a hard time finding the right treatment for them. And we think U2 could fit very nicely for those patients. And what we say is that those patients are primarily located in the community. And about 80% of CLL patients in early lines of therapy for second, even third will be treated in a community practice -- community setting and about 20% in academic centers. In the academic centers, most of them are -- all of them are completely comfortable using both BTK inhibitors and venetoclax. And in those settings, unless again, there's someone there is -- there could be a rare patient and they do exist. That is not a good candidate for either of those compounds that U2 would be used potentially in the first line, but more likely than not -- or second line in those centers, but more like than that in the academic centers, U2 will be there for patients who go through both BTK and venetoclax. And there's a handful of those patients. Again, it's not huge because the academics are only treating about 20% of the total patients anyway. When you go over to the community side, 80% of the patients are treated there. There's a portion of folks who are using venetoclax today, that's come up a bit from the past. Although during COVID, that's probably a little bit more measured than it was even previously. But the -- but there's still the majority to potentially super majority of community sites are not using venetoclax. And so in those centers where patients will come off a BTK or they want to go into BTK, but they'll have like I said, using the large -- again with some sort of cardiovascular risk factor, U2 really represents a good option for them. So there's going to be some portion of first-line patients in community practices that are not good candidates for BTK might otherwise go on to chemotherapy -- chemoimmunotherapy, where U2 could be a really nice option for those patients. And then the biggest market of all will be patients in the community that come off BTK therapy, whether it's for tolerability or for progression and they'll need another treatment option instead of chemoimmunotherapy, and U2 will be right there for them. So we think there's a really nice set of unmet medical needs. Like I said, most patients are well served with current treatments. But unfortunately, there's still a large enough number of patients that will still need additional therapy.

Right. And you and I have talked in the past about triplet and potentially even quad therapy for CLL. The Phase II ULTRA-V trial of U2 plus venetoclax has been fully enrolled in the Phase III ULTRA-V, study has been initiated in frontline and second-line CLL patients. Maybe if you can just tell us a little bit about these 2 trials. And you do have Phase I data, so maybe you could discuss that as well.

Yes. So we are excited about the U2 plus venetoclax combination. Our expectation, as I described the market, is that there is still, like I said, the majority of the community practices that are not using venetoclax yet. And in small practices without the right capabilities, venetoclax could present some dangers. And it's not that they are -- it's fair for them to avoid venetoclax today. However, over time, we do think that they will build and become more comfortable using venetoclax. And so there will be a point, I think it's probably 3 to 5 years from now, where the vast majority of the community will be using venetoclax, and we'll have a convergence of practice between epidemics and community. And our expectation is that most patients, if they want a limited duration therapy, will either get venetoclax plus a BTK or U2 plus venetoclax. And I think there's a lot of good reason why you'd want to choose U2 plus venetoclax in that setting versus a U2 plus a BTK. But either way, we think it's an important place for us to be in the market and again, secures us as the only non-BTK option to be used with venetoclax for advanced therapies of triple -- doubles and triples. So we're excited about that. The data so far, our data has been, I'd say, exceptional. We're very pleased with it, very small numbers. So take it with what they're going to solve. We've got a lot more coming behind and we'll see where we come out. But right now, in our Phase I study, I think we had about 20-something -- low 20s numbers of patients through 12 months of therapy, which is essentially the point in which we'll take a bone marrow to see how well the patients are doing toward undetectable minimal residual disease or undetectable MRD. Right now, we have about, I don't know, give or take 75% of the patients will achieve undetectable MRD, and these are relapsed patients. And that number, if we were to hold even close to that, would be the best undetectable MRD data of any combination ever reported in CLL. And again, too few patients now to be comfortable declaring victory, but we're on a good track. Just to give you a comparison, BTK plus venetoclax shows about 50% undetectable MRD in relapsed patients. So we've got a bit of a lead for the moment. There is some scientific rationale, which you can talk to Dr. Owen O'Connor about. I'm not going to go through it here, but there's some interesting scientific rationale why a PI3K may be more synergistic with venetoclax. That as it may, we've got a lot more data behind it. As you mentioned, the Phase I data will -- I think the abstracts for IWCLL will come out soon, very soon as a matter of fact. And so some of that data will be out and then the more updated data will be presented at the IWCLL conference. So that's the Phase I. We enrolled 150-plus patients into the ULTRA-V Phase II, which is, again, U2 plus venetoclax. So that data will probably be available in the first half of next year, again, through 12 months of therapy, so we can see the undetectable MRD at 12 months. And then as you noted, we're enrolling into the Phase III portion of ULTRA-V. So we finished the Phase II at 160 -- 150, 160. And then we're going to be moving on to -- we are moving on and enrolling into Phase III right now to the randomized trial.

Great. Thanks, Mike. And you mentioned the BTKs and there's a number of them on the market, and you're developing your own BTK, TG-1701. So before I get to MS, I just wanted to ask if you can just give us an update on development there and perhaps your thoughts about the commercial opportunity for your BTK?

Yes. We're excited about the BTK. It's a really nice BTK. We're developing it in a way that we think is optimizing the safety profile and -- but keeping maximal activity. So right now, I look at 1701 as having 3 potential opportunities for us. One is 1701 as 1701 solely second gen covalent inhibitor that will compete with [indiscernible] in the -- in what I would describe as the better tolerated BTK marketplace. And if one assumes that over the next 10 years, more patients are going to move to the better tolerated BTKs and away from ibrutinib, then 1701 could compete nicely in that space. And if that's a $5 billion or $6 billion space at that time, which is speculative, but could be 10%, 20% market share in the better tolerated BTK space is pretty interesting. So 1701 has an interesting opportunity. And then 1701 in combination with U2 is an area that we're very excited about. And we look at it potentially in 2 ways. One is creating a better tolerated regimen using UKONIQ potentially at lower doses and using 1701 at lower doses and trying to really dial out as much of the known toxicities of each class while still maintaining activity. So coming up something that's really super tolerated and has a really nice activity profile. And there's reason to believe that you would expect less breakthroughs when you're hitting the pathway in 2 places versus a single point on the pathway. So something interesting there. And then potentially using even more aggressive dosing and trying to come up with limited duration therapy. So 3 ways to win -- leveraging our or BTK.

Great. And last but not least, I just wanted to get your thoughts on your BLA submission for ublituximab in MS with your ultimate Phase I and II studies. And maybe just give us your thoughts about where that will -- that product could sit in the market.

Yes. We're obviously super bullish on ublituximab in MS. It's going to be a 3-horse race for what could represent. We've always said we thought it would be about 40% of all MS scripts would be to CD20s. Right now, the 2 alone are tracking at 46% to 48% and growing. So the class could end up being greater than 50% of all new patients enrolled into therapy. So it's getting bigger and bigger. Our place in it, we're -- every day we talk to physicians, we get more excited about our positioning. The 1-hour infusion is really attractive for physicians, and we know it's going to be attractive for patients. And if we can leverage price to gain another advantage, we'll do it. If we don't see an advantage of taking price and the payers don't like it, I know it's bizarre to think that way, but we're going to try to take price, and we'll see the payers if they're willing to work with us. But the profile with the 1-hour fusion every 6 months, the very low annualized relapse rates, we think we've got a great profile in a very, very large market, so -- and growing. Again, like I said, our original expectations were that CD20s would represent 40% and they're already at 46% to 48%.

Well, it is a great opportunity for you guys, and I wish you much luck with that. So Mike, I just want to thank you for your time, and thank everyone for attending the presentation. Hopefully, the next conference will be one that we can hold in person rather than virtually. But in the meantime, we're very grateful for your flexibility and your presence online this year.

4 Thanks, Ed. Appreciate it. Great to see you.

Good to see you.