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

All right. We'll get started with the next session. Thanks, everybody, for joining. Good afternoon. I'm Eric Joseph, senior biotech analyst with JPMorgan. Our next presenting company is TG Therapeutics. And to bring us to the story is company's CEO, Mike Weiss. There's a Q&A session after the presentation. So if you have a question, just raise your hand, we'll bring a mic around to you and folks can submit questions via the online portal as well. So with that, Mike?

Thank you very much, Eric, and thanks, JPMorgan, for having us. I was just noting earlier. I think it's my 13th JPMorgan presentation for TG Therapeutics. Did a few more before that. But I'm excited to say it's the first time they get me out of the basement. It was hard to do, but we're finally in an actual room. So thanks, Eric and JPM. All right. So we'll get started here. I am going to be making some forward-looking statements, so I do encourage everyone to -- who is interested to review our public disclosure documents available on the Internet. All right. Just a quick backgrounder on TG for those of you who aren't familiar with the company. I founded the company in 2012 with a group of close colleagues with a focus on B-cell mediated diseases. We have one drug approved. We're going to spend most of today's session talking about that drug. We have 2 products under development. One is actually a reformulation of one of our approved drug and one is a novel product. We're very excited about it. It's a CAR-T for autoimmune diseases. It's an allogeneic CD19. We'll spend a little bit of time talking about that. We're still a small company, only about 325 employees. So we've kept ourselves small, but I'd say, mighty what we've accomplished, and we're going to talk about that in a few moments. And our corporate headquarters are in Research Triangle, North Carolina. As I mentioned, we're going to spend most of today's session discussing BRIUMVI, our approved product. It's a next-generation anti-CD20 monoclonal antibody for patients with relapsing forms of multiple sclerosis. The drug was approved in late 2022. We launched about a month or so -- actually less than a month later. We are commercializing in the U.S. We hired a top-notch experienced MS team, and you're going to see some of the results of what's happened in the last 7 quarters of -- full quarters of work. We partnered the -- outside of North America rights with a great group called NeuraxPharm. They're doing a really nice job. They launched in Germany, the first country in February of 2024. I think they've launched in another bunch of countries, and I think they're targeting 25 to 30 countries globally. So very excited about working with them. And what's also nice, another number on here, we like to talk about, we do have patents through 2042. So a really long runway to build out the BRIUMVI franchise. CD20 agents have really transformed the treatment of relapsing MS. So the first CD20 was approved for non-Hodgkin's lymphoma in 1997. It took about 20 years, actually almost exactly 20 years, 2017 to get the first CD20 approved in MS. Since then, there's been 2 others. Ours was the third to market. Finishing up the group, there's only -- there's not likely to be another CD20 approved. So I think we're locked at 3. And as I said, it's transformed the treatment of MS. We have now about half of all patients that go on to a DMT are on an anti-CD20 monoclonal antibody. It collectively represents the most prescribed class of drugs. So again, it's a big class. We're in it now, about $8 billion in annualized U.S. sales as of the end of the third quarter, growing to about $12 billion. Admittedly, as third to market, we're not a huge portion of that $8 billion just yet, but we do expect to participate in the growth of this area. And again, you'll see we've made some really nice inroads to get started. The BRIUMVI difference. So we're in a competitive market. We're going against 2 large pharmaceutical companies. We're third in. How in the world are we getting market share? You come to the market with a best-in-class product and you combine it with a best-in-class team, and you're going to capture market share, and I think we're doing a great job doing it. So let me talk about some of the differences you'll find with BRIUMVI. Administration. So one of the most obvious and simple things you could see with BRIUMVI is it's a 1-hour infusion twice per year after the starting dose. The competitive product is offered as a 2- to 3.5-hour infusion. So again, we get a lot of good feedback from patients as well as HCPs, health care providers, about the 1-hour infusion. From an efficacy standpoint, this is the first and only anti-CD20 that's reduced annualized relapse rates to below 0.10. That's about in Phase III trials, that's 1 relapse in every 10 years. So this is the first time that's ever happened in a Phase III trial for an anti-CD20 monoclonal antibody. I'm going to show you some of that data momentarily. In terms of the label, what's nice about BRIUMVI is it does not include a breast cancer risk in the label, given the fact that about 70% to 75% of folks with MS are women. We've heard consistently that this is an important feature of BRIUMVI. And then design, there's a fancy word glycoengineered, but this compound was specifically designed to engage the immune system for more efficient B-cell depletion. We do think that this glycoengineering accounts for efficacy, potentially efficacy advantages and also to the tolerability profile. And again, I'll talk a little bit more about that as we move forward. And then price. We came to the market with what we believe is a best-in-class molecule. And instead of what a typical pharmaceutical company would do, we would come in with the highest price. We decided to come in with the lowest price. Not only are we the lowest price of any anti-CD20 monoclonal antibody, but we're the lowest price for any branded disease-modifying therapy for MS. So let's talk about the data a little bit. As I mentioned, BRIUMVI was glycoengineered to enhance its ability to engage the immune system. So we don't have head-to-head trials in MS looking at an engineered CD20 versus an unengineered CD20. But in CLL, there was an unengineered CD20 that was compared to an engineered CD20 like BRIUMVI. And in CLL, chronic lymphocytic leukemia, there was a survival advantage of using the engineered CD20. Like I said, we don't have head-to-head trials in MS with other CD20s, but against an active control in this trial shown in blue, which is a generic form of Aubagio, teriflunomide, we cut the risk of relapse in half. So this is relapsing forms of MS. Very important part of the disease process is the relapse. And not only do we lower below 0.10, but we took it down to 0.091 in one study and 0.076 in another study. That equates to about a relapse 1 in every 11 years to 1 in every 13 years. So really nice reduction in relapses. And then now we have 5-year follow-up data, which we just presented recently at the ECTRIMS conference. So the first thing I'll draw your attention to is the patients that crossed over. So they're represented by the half blue, half green bars. And what you can see in year 3 of the study, they had a reduction that was exactly the same as the patients in the randomized portion. So they brought their relapses down to also about 1 relapse in every 13 years. So you can see really nice consistent benefit, both from the randomized and from the crossover. But the most interesting part of this slide is if you look at the patients who are on BRIUMVI for 5 years, all the way at the end in the box, those patients brought their relapse rates down to 0.02. Let me say that one more time. That's a relapse rate of 0.02 that equates to 1 relapse in every 50 years. Now if you think about it, most folks will be diagnosed with MS between 20 and 40. So in essence, we're hopeful that they'll barely have 1 relapse in their whole lifetime if they stay on BRIUMVI. Again, it's only 5 years and not 50 years, but it is really encouraging data. From the safety side, BRIUMVI is a CD20. There's 2 types of AEs that you worry about when you give a CD20. You worry about upfront infusion-related reactions. These are generally mild to moderate and typically associated with the first dose. With BRIUMVI flu-like symptoms are most common. This is headache, chills, fever. Typically, like I said, once you get past the first dose, the rate drops precipitously and then it stays low through the course. Probably the more important concern when you give a CD20, BRIUMVI included, of course, is infections. We are depleting a portion of your immune system. Some of these infections can be serious, sometimes fatal. Infections should be considered when prescribing BRIUMVI and any other CD20. Having said that, we do now have 5-year data, and we're super excited to say that over this period, the AE profile remained consistent. No new safety signals were seen. And there was no increase in the rate of infections over time. You might expect to see something like that. This data is very encouraging. Okay. So I'm going to switch gears a little bit, start talking about the commercial. That's a backdrop. That's what we think makes BRIUMVI special. Now how are we going to get to the market, how did we get to the market. We really set up a strategy that was quite specific for this opportunity and for our company, but we really wanted to maximize return on investment. So we went after opportunities we thought we could do effectively as a smaller company without just throwing money away. So in year 1, we were hyper focused on targeting health care providers in the top centers. When we first launched, we said there were about 550 centers that would represent, we believe, about 70% to 80% of our business. And we hired a team of really phenomenally experienced professionals with MS under their belt for years, and they were set out to go after these top centers to educate them and introduce BRIUMVI. And I think that worked really well. We -- so of the 550 centers in year 1, we said your focus is on about half of those centers, which because the curve -- yes, whatever, I can't really describe that curve right now. But anyway, that curve in that first -- in that half a group, it was more than half of the potential business. So anyway, so that was year 1. I think the results from year 1 speak for themselves. And then in year 2, we expanded the team. We stuck to the same formula. We hired the same high-quality people. We pretty much doubled our commercial team, our field force between year 1 and year 2. That gave us the ability to expand not only the breadth and depth, but also the frequency of interactions with HCPs. And again, this gave us the opportunity now to build out to the full 550 centers that were in our original target audience. Like I said, momentarily, you'll see the results of year 2. So what's year 3 going to bring? We're going to start to engage directly with patients. The -- probably the one thing we hear most when talking to HCPs when they're offering BRIUMVI and they're offering the other CD20s is name recognition from patients of the other drugs is a reason why they don't choose BRIUMVI. So this is now we're going to start to engage with -- directly with the patients. Our competitor companies in this space are spending somewhere in the order of collectively $200-plus million a year in direct-to-patient programming. We are definitely not going to compete on a dollar basis, but we do think we have a lot of creative ways to engage with patients to build that brand awareness. So who's interested in hearing how we did in the fourth quarter of -- anyone? Okay. So big drum roll. So Q4, we had our first $100 million quarter. Everyone was -- clearly, we're super excited about it, just under $104 million. What you can see on the slide over here, really nice growth year-over-year, about 160% growth from Q4 2023 to Q4 2024. With that, just a reminder, when we started the year of 2024, the consensus was about $250 million for BRIUMVI with almost $104 million in sales for the fourth quarter. We ended up coming in at about $310 million in U.S.-only net sales for 2024. That equated to about globally, I think, just over $320 million globally for us. So a really nice year, which landed us in the 7 full quarters, just under $400 million in cumulative revenues. So BRIUMVI has continued to exceed expectations, both of Wall Street, but also internally we've been super pleased with the uptake. And we've done this in a highly efficient manner. So remember, I said we started this with the idea that we were going to look for the most efficient opportunities, looking for return on investment. So this is a simple measure just looking at basically to the dollars you invest, how much you get in revenues. We're running at about $2 of revenues to every dollar of expense in our seventh quarter. If you line that up against other companies that have launched neurology drugs over the last, I think, since 2016, we stand at the highest end of the efficiency scale. And obviously, that was the plan. That also gives us now cash flow, nondilutive funding now to reinvest and go into our Phase III of our launch plan that I just described, with our ultimate goal of being the #1 prescribed CD20 for patients with relapsing forms of MS on a dynamic market share basis. So dynamic market share is basically the new starts per year, right? So that includes patients who have never been treated before, so totally naive to treatment, but also includes folks that are switching from one therapy to another. So that is our goal. We've said this multiple times. We believe we can get there. And here's how we're going to do it. We talked about some of what the Stage 3 plan of where we're going. But there's one other market dynamic that we haven't talked about yet, and it's the IV versus subcu portions of the CD20 market. So based on patient preference, based on health care provider preference, they are really becoming 2 distinct markets. You've got IV/physician-administered side of the market. And then you have the subcutaneous/self-administered, right? So this is something that's at home, the patient does it to themselves, they inject themselves, ideally with an auto-injector. So there's 2 sides to this market. Currently, we're only competing in one side of the market. So there's 2 competitors vying for the dynamic market share. So the new patient starts that come in for IV therapy. But there are just some patients who don't want to travel to a center, prefer to self-inject themselves. And that group has self-identified, and it is about 40% of the market. And we don't have an offering today to compete. So we're only competing only still the biggest part of the market is pretty good for 60%. And we're going to continue to drive market share gains. We'll talk a little bit more about how we're doing that. But I think the next component is bringing competition to the subcu self-administered market. Again, it's a significant subset. And our goal is to develop a potentially best-in-class patient-administered subcutaneous BRIUMVI. So that's where we're heading. Let's talk a little bit about what we're doing to build and grow our market share in the IV side of the market. Of course, we just talked about it, we're going to execute on our Stage 3 of our launch plan. That means we're going to start to make an effort to engage directly with the patients while also continuing to build and grow our field force, the way we've been doing it. Again, we just want to continue to build out so we can have greater depth, breadth and frequency of engagement with HCPs. And then we also want to enhance the patient experience. The current regimen is already a differentiator, right? The 1-hour infusion has been extremely popular. It is one of the key features of why people, both individual with MS as well as HCPs will choose BRIUMVI. But -- if we could do better, we want to do better for folks, right? If we can do better, we will. So the current regimen is day 1, you come in for 4 hours, you get a starter dose of 150 milligrams. Then 2 weeks later, you come back day 15, you get your 1-hour infusion, 450 milligrams, that's a full maintenance dose. And then you'll do that every 6 months. One thing that we hear from both health care providers and patients, particularly infusion, nurses on the HCP side is that the certainty of giving that 1-hour infusion that we currently offer is a big deal. Apparently, it is not so certain when you're giving a 2- to 3.5-hour infusion that you're actually even going to get it in that time frame. So we have data, 95% of the patients will get their 1-hour infusion within 1 hour. And again, that -- when we presented that data, people lit up. We knew we had something just with the certainty of that infusion. But like I said, we want to do better. We can do better. So what we're looking at first is combining the day 1 dose with the day 15 dose. If we can avoid bringing the patient back 2 weeks later, we've talked to HCPs and patients. This is something that people are really enthusiastic about. Are we confident we can do this? Yes. And when we were studying this drug in lymphoma, we gave 900 milligrams in less than 4 hours on day 1. We already have treated, I think, over 40 patients in our ENHANCE trial with this regimen at 4 hours or less. So we're feeling very good about it, and our goal is to launch a pivotal trial, hopefully very soon to explore combining that day 1 and day 15 dose. And then we're also looking at a 30-minute infusion. Now some may say, isn't 1 hour good enough? Actually, it is pretty darn good, and most people don't feel the need, but there are some people who would like to go in and out faster. And so if we can offer people another option to get in and out of the infusion suite faster, we're going to do it. Doing a 30-minute infusion with another IV product, I think people would not even attempt it. So again, this does relate back to -- earlier, I mentioned that the engineering of this compound not only maybe impact efficacy, but impacts tolerability. And we do think that, that mechanism is why we're the only ones who seem to be able to give an infusion of a CD20 at this pace. So we've already presented on, I believe, about 30 patients from the ENHANCE trial. Next -- and since then, we've treated probably another 40. So I think we're up to about 70 patients treated with 30-minute BRIUMVI. So we're feeling good about moving forward. Again, the plan is to launch a pivotal trial as soon as possible to get that started. So the goal would be to update the label with these 2 trials so that we can offer folks both the original regimen plus this simplified regimen. And then subcutaneous market, right? So this one, we're not participating in at all. So we want to make sure that we have a dog in this fight. We've been pretty vocal about what we're targeting as our profile. We've talked about this previously. We want to be able to use a subcu delivery auto-injector, something that is relatively simple to use, site of delivery at home, actually, they could do it at home, they could do it at work. They could do it anywhere they want. I don't care, as long as they're just doing it themselves, and it's easy. And no HCP, no health care provider is required. And frequency, we've been talking about this quite a bit. The current offering available to patients in the subcu market for anti-CD20s is a once per month subcu auto-injector self-administered. We'd like to take this to at least every other month. So cut in half the number of times per year you'd have to self-inject. And I'm happy to report the big update. We have completed some preliminary bioavailability studies. We feel comfortable that those studies do support at least every other month dosing for subcu BRIUMVI, and we are comfortable targeting commencing pivotal trials around the middle of this year. Okay. So if BRIUMVI in relapsing forms of MS was not enough, we certainly think we could do other things. But before I do move on, BRIUMVI in RMS is and still a very untapped opportunity for us. We have room to grow our market share significantly on the IV side, and we have room to join and compete in the subcu side. So we think that, that is a multibillion-dollar opportunity for BRIUMVI. We're not going to take our eye off the ball, but we do think it's okay and interesting for us to look at some other opportunities. So we are -- we've talked about this quite a bit. We are looking at indications outside of MS. The first indication we're looking at for exploration is myasthenia gravis. This is a neuromuscular disease. We think this is a really nice/easy transition. It fits within our general neuro platform. Most of the multidisciplinary community practices have folks who focus on MG and MS. So we think it's near to where we are today. We're going to look at a lot of -- we're going to look at potentially a number of other indications, but we think this is a good place for us to just dip our toe in outside of MS and get moving on this. So like I said, we'll look at some other indications. And then we have -- I mentioned earlier on, we have azer-cel, which is an allogeneic, so off-the-shelf CD19 CAR-T. We partnered with Precision Bio last year, basically right at the time of this conference. We have a cleared IND. We've got sites that are in activation mode, and we do expect to have first patients enrolled quite soon. Here, again, we're focused -- this -- we're focused in progressive MS. The one thing I'll say about CD19 CAR-Ts in general in autoimmune diseases and neuroinflammatory, neuromuscular, this is a massive opportunity. This is not a one company opportunity, right? So we're going to start in progressive MS. We have home field advantage. This is a space that we know extremely well. There's very little competition in MS for these kinds of drugs. We will look at other indications as well. But personally, I think this is an area of great potential, and we are very excited to be pushing forward and starting our clinical trial. And then beyond that, we do get a lot of questions about how we plan on allocating capital. We are operationally positive. We'll have positive net income. So whatever money we have left over after we do everything we can to exploit and build on the BRIUMVI opportunity in RMS and the other indications in [ azer-cel ], we continue to look for new pipeline opportunities. We have a share buyback plan that is open. We continue to repurchase shares. I'm pretty sure we're actively buying shares almost every day. And then, of course, we'll just evaluate any other investment opportunities that we think makes sense. Okay. So I'm going to wind down this presentation. I'm sure Eric will be very happy about that. He gets to ask his questions. But just a quick one here in terms of the goals. So from the R&D side, we talked about this, right? We're going to get, we believe, 3 pivotal trials open. Hopefully, all 3 will be open by midyear. Looking at subcu BRIUMVI, looking at IV side, combining the doses day 1 and 15 and looking at that 30-minute infusion. And then, like I said, enrolling patients in diseases outside of MS and really pushing forward with the CD19 CAR-T, which again, we think is a really exciting opportunity. Okay. Let's finish off here with some financial guidance for 2025. In terms of revenues for 2025, we're looking at global revenue of about $540 million. That's comprised primarily of our U.S. net revenues, which we're targeting around $525 million. What I'd say is it's very early in the year. So we didn't even think we can come up with a good range. We came up with an approximate point estimate. I think as we go through the year, we'll try to come up with maybe a range. Maybe we'll update the point estimate if we need to. But as of the moment, we think targeting around $525 million in U.S. net revenues for BRIUMVI for '25 is a good starting point. We're not going to give 1Q guidance today. We're going to wait until our call in February. Last year, we just -- it was too early. I think we were probably too conservative. We don't think that's appropriate today. So as we have more information, we will update on the Q1 breakout. In terms of operational expenses for the year, we're targeting about a $300 million spend, potentially more, we'll see, but $300 million-ish is what we're targeting. I will say last year, our target was $250 million, and we only spent about $220 million of it, probably even a little bit less. So we'll see where we come out this year, but we do have a lot of good uses for the capital, 3 pivotal trials, direct-to-patient programming. So we do think we have a lot of good uses. And then just one balance sheet item. We do have $310 million in cash. It's not that important of a matter today, cash for the company. We're generating, like I said, positive operational cash. We have positive net income, but we're starting the year with cash on the balance sheet. So no one has to worry. Cash is not a problem. All right. With that, I'll thank everyone for their time and attention, and we'll move on to the Q&A session.

Thanks, Mike. I think I might pick up first on the subcutaneous -- the subcu update here, something that will support -- you have a profile here that would support at least once every other month dosing. Is that more or less defining the regimen that you anticipate moving into a pivotal study? Or sort of what additional work or -- I guess if that's the floor, where is the ceiling in terms of how long you can go in terms of dosing interval?

Yes. I think the ceiling is probably quarterly. I mean, to be fair. I don't think we're getting to every 6 months. So I think the delta is not tremendous. So it's either 6 times a year or 4 times a year, I think, is the bid-ask at this point. But like I said, I think we're comfortable in every other -- every month to get started for sure.

Is that, I guess, in the views of patients, I mean, it certainly makes sense, fine. I need to inject myself less times a year versus Kesimpta. But I mean, market feedback that you've kind of garnered to kind of speak to the -- how much dosing frequency is a pain point for physicians self-administering.

Yes. So we've done a little bit of research. We're going to do more. I think the general consensus is less is more. So you could say that it's no big deal, whether it's 6 times a year or 4 times a year, you're getting to a point of diminishing marginal returns, but still less is still better.

Your view on the [ non-cell depleting CD40 ] ligand. [indiscernible] how does that situate with your strategic thinking and [indiscernible]?

Yes. So again, we're talking about Phase III results, randomized trials. I mean, I think our results in our Phase II were pretty darn low as well. So you're going to see differences. Yes, I think CD20s are going to be the worker of treatment primary. I think their goal is probably to find an exit ramp for CD20s at some point. I think, what is it a monthly dosing. I think it's going to be hard. I mean, one, we'll see what their actual results are in Phase III. And two, to be competitive at once a month, those results are going to have to be different. I don't think they even expect that they're going to replace CD20s. I think it's a nice product potentially as for patients who can't tolerate or need to come off of CD20. But I think at monthly dosing, it's going to be hard to replace the CD20.

Can I ask the same question for T-cell engagers [indiscernible] biosciences whatever?

Yes. So the question is about T-cell engagers in, I guess, across autoimmune diseases. I think T-cell engagers are interesting. They probably have a place. It's probably not in MS necessarily. I don't think they probably have the CNS effects. I mean they're going to be similar to potentially B-cell treatments like anti-CD20s, but CAR-Ts that more likely will traffic into the CNS are going to be more interesting in diseases that are more characterized by CNS involvement. I think their particular problem is not universal to the entire class of T-cell engagers. So I think we're generally enthusiastic. I think T-cells engagers could have a role, probably less important in MS than some other areas.