TG Therapeutics, Inc. ($TGTX)

Good afternoon, everyone. Thanks for joining us here at the Goldman Sachs Global Healthcare Conference, including everyone joining us virtually. Thrilled to have on stage with us today the Chief Executive Officer of TG Therapeutics, Mike Weiss.

And maybe we'll just turn it to you to start with kind of an overview of the business, key priorities over the intermediate term. And I've been asking everyone, how do you think about the core competencies of your business?

Sure. And thanks for having us. Always delighted to be in [indiscernible] Miami. [indiscernible]. So at TG, we try to keep things relatively simple. We've got our Reunvinow approved for relapsing forms of MS, we're about 3.5 years is into the launch. Our target this year. I think we're at $885 to $900 million in terms of revenue guidance for the U.S. alone. And in terms of key priorities for the year, 1 is obviously continued commercial execution. That takes up a good portion of what we focus on care about. We've had a few interesting readouts recently. So we have our ENHANCE study that read out recently positively. That hopefully will lead to a label change in 2027 to simplify the onboarding. We'll talk [indiscernible] sure at some point, but day 1, day 15 combination on day 1 simplifies the onboarding on to Miami. And then we also had some positive data around our subcu program I'm sure we'll end up talking more about that. So I want to tell you too much, but hopefully, that will lead to a new product line for us in subcu in 2028. And today, we announced a small cohort of patients with MG and the start of a Phase II potentially registration-focused study in MG. So I think it's continued to execute on our plans to get the label update for ENHANCE '27, get to the subcu in '28 to carry through on the MG study, while we, of course, just like back to commercial execution.

We'll get to the MS thing, but just it's breaking news, we'd love for you to spend a little bit more time on the MG data that you released today and kind of how it sets up a registration -- a potentially registrational Phase II program.

Yes. So we're excited. MG is something we've been thinking about for quite some time. We were able to get a small cohort of 11 patients into the Phase I subcu study. So that was really nice addition for us. The data looked, I think, great -- it's great as you can get for 11 patients to put it into context. Again, we're not talking about hundreds of patients. But I think it was just a confirmation of effect, which we expected, right? It's no surprise that CD20s would work in a cohort of MG patients. So I think that's -- was confirmation enough for us to move forward both the historical usage of CD20s and this age in particularly, which we think is differentiated. So the 11 patients look quite good. On top of that, we came up with, I think, a creative study design to sort of meet a need in the MG marketplace. It's become a little gradual with FCRN and complement inhibitors, which is great for patients. But every time you add new therapies, you end up opening up new opportunities. And so we took advantage of the new opportunities. The FcRns are dosed weekly and then intermittently and patients will go through these cycles of having very good responses on their symptom scores. And then you don't treat them and their symptoms come back. And then you treat them again, you bring them back down on their symptoms, and then they come back. And so this episodic treatment. One is can imagine it's great for patients to have to continually go back and forth with their disease. And then when they are treated, they're treated on a weekly basis, we think [indiscernible] could have the ability to maintain those really deep clinical benefit and just keep it there. So you don't have to continually go back and get retreated.

So you're mentioning the kind of unmet need that you see in MG despite the competitive landscape. I guess how are you designing the Phase II study to make sure that you kind of prove out that it meets that unmet need?

Yes. So the way the study is designed, is that all individuals will basically go through the 4-week run-in for [indiscernible] if you could say it, I think Goble, can't really see the whole name, but cart for short, they'll go through the standard 4-week, and we expect about 70% of those patients maybe 75% of those patients will get a really nice response from that. And then right after that, we start the standard dosing of Brioni. We're using it experimentally for the moment, the standard approved dosing. But as you know, from our subcu stuff, we'll be able to use subcu [indiscernible] assuming that we're successful somewhat interchangeably. So we can then swap it out. I think the ultimate goal is to have the product profile be a subcu for that indication. So every patient will then -- in theory, patients that got the benefit will be down on their symptoms. We then treat the patient at that point. And the goal is to maintain those patients at that level of benefit. But perhaps we'll see some additional benefit. That would be great. And then the patients on placebo infusion, their natural course is to return to baseline at some point, whether it's 8, 10, 12, 14 weeks, 1 would anticipate they would return to baseline. And so it's basically a -- you can look at it as almost have a Myer curve, right? It's going to be like a time-to-event analysis. And we think we have a really good chance of maintaining those patients.

And have you stopped with regulators and got alignment on the trial design or like where are you in that process?

So from a registration standpoint, when you're using a Phase II trial, there's really no alignment for regulatory purposes. I mean, obviously, IND, it's a U.S. study. The FDA has looked at the trial. But in terms of whether it's registrationable is a later discussion. And it's going to be data dependent for sure, and then obviously, it always becomes a review issue for sure.

Okay. Maybe we can turn back to the commercial execution. And like you mentioned Bambi launch now in its fourth year guidance, $85 million to $900 million. I guess what are the key considerations? And how do you think about formulating that guidance? And then kind of from there, what do you think of as potential drivers of upside or within that range?

Yes. So a nice part about the Brioni business at this moment is we do get a lot of repeat business. right? This is a business where patients will continue, hopefully, to come back. I think we've always modeled and we maybe talk about this, we've always modeled in about a median 5-year for treatment course. So there's a pretty large accumulation effect. So when we start a new year at the beginning of that year, we have a pretty good sense of what the base business looks like based on are expected for systems. And then the key variable on top of that is, one -- do we continue to see that persistence, right? So that will change. And then the new business that comes in every year. And if you look at something like ocrelizumab, the vast majority of their business is accumulated business, right? It has to be, right? There's not -- I mean, you've got approximately, I think it's 80,000 patients will seek a new treatment every year. So it's the dynamic here. About half of them will go on to a CD20. And then obviously, within the CD20, now there's 3 agents, and it's relatively competitive for those 40,000 potential patients. And so when you think about, I think ocrelizumab probably has 100,000 to 125,000 people on their portion of the new market is going to be a fraction of the total. So again, a key -- the 2 keys will always be, at this point, persistence -- are we seeing the same or better persistent than we expected as we go into the year for the patients who have already been treated and then our market share gains.

So as you think about kind of the portion of sales that are derived from patients who are staying on therapy versus patients that are new to therapy, where do you stand today in terms of the proportion of sales that come from patients already on drug? And where does that get to over city seats?

Yes. So I don't have the exact percentage, but I do think if you look at something like ocrelizumab, my guess is at this point in the maturity now we're capturing market share -- so -- but the point in which you don't capture any more market share, my guess is it's an 80-20 split, give or take the base business to -- for the new dynamic business.

So speaking on the market share piece, I guess, what can you share in terms of the share of the switch patients or the newly diagnosed patients, that 80,000 dynamic population that you talked about?

Yes. So that 80, again, goes down to 40% of the dynamic share for CD20 class. And within that class, we said something publicly, we said we were approaching about 1/3 of the IV business, which translates to about 20% of the overall business. That market share has been growing. We haven't updated the number with precision. And some of the precision is somewhat challenging because the quarter-to-quarter, the dynamic share does change. It's not a linear 10,000 per quarter for the year of the 40,000. So it's not perfect linear. But within that context, we did say that the first quarter of '26 was our best enrollment quarter ever, and I'm highly confident that we'll see another record quarter in 2Q.

Great. In terms of the kind of revenue trajectory from here, 2027 consensus is north of $1 billion, so blockbuster status in year 5. But you said that the peak opportunity still multiples from where we are today, give me more specific about kind of how you're thinking through the peak opportunity and in particular as well the path to getting to peak, like how long will it take?

Yes. So not selling us short. I mean, we will be at -- our projections are that we'll be at a run rate -- $1 billion run rate before the end of the fourth year of a little bit faster. But -- yes, I mean, [indiscernible] We're on the same page. -- on the same page. yes. So we are on the same page and obviously comfortable with those numbers, where we stand. Of course, we end the year the run rate of beyond $1 billion, we certainly think next year is north of $1 billion in sales. We haven't given any obviously specific guidance. But what we have said and I think you're alluding to is in our last conference call, when I talked about the IV business alone, I said I thought we were years and multiples away from peak just of the IV business alone. And so with IV business tracking towards $885 to $900, multiples of that in years away. Again -- it's -- I don't have the exact year, but I could tell you that it's not anytime soon, which is a good thing. But it will be approximately 5 years after we stopped taking market share, right? So when the dynamic share flattens out, and I'll just pick any number, let's say, at some point, we are 50% of the IV dynamic share business. And so for IV business, once we hit that point, if we don't keep growing it, holding aside the fact that probably the overall market is growing, but putting that aside, just holding constant the entire market is not changing. At the moment, we hit our peak market share, -- we're probably 5 years of accumulation away from steady state, right? So that would be peak. So that doesn't include, obviously, where we are with IV, but that's the -- I mean, with the subcu. So that's the IV portion of the market. So I do think we are multiples away from the peak and years away in that context. And I believe that we will continue to gain market share over the next 3 to 5 minimum 3 to 5 years and probably longer.

Great. You mentioned at the top, but you have a few more kind of convenient dosing strategies in the works, including the enhanced profile as well as the subcutaneous product. Why do you think it's important to have these offerings to physicians and patients? And what do you expect that to drive in terms of share gas?

Yes. So it is important to focus on the patient and the experience. I think -- it's like Maslow's 5 stages of realization, right? [indiscernible] So at the beginning, you just got to make sure you've got food and shelter, right? And that's, of course, if you think about it in the treatment landscape, you just want to give someone something that helps them. And then you want to improve upon how it helps them, but you also just want to make it easier for them to enjoy their lives, right? So the more we can optimize the process for what we believe is a best-in-class drug. The easier it is for folks to enjoy the benefits of it. So removing the day 15 dose to, I would say, somewhat to our surprise, we continue to hear really positive feedback from both patients and from clinicians and centers. So yes, we just think it's important to continue to think about the patient experience. the journey.

Maybe we can talk a little bit more about the subcutaneous product because you did just have bioavailability data last week. I guess, again, on that question, what is the role that you see subcutaneous offering playing in the market? Why do you think it was important for you to participate there?

Yes. So the market for CD20 is, as I talk about those 40,000-ish patients, and that is growing, it's not linear growth. Some quarters, it's a little lower because I said it's not -- every quarter is not the same. But the trend line is growing. So there are more patients in that 40 that will continue to come into the system. But it's just easier to keep that constant. So of those patients, 1 of the threshold questions after a clinician speaks to decide that they want the patient on the CD20 is do you want to self-inject or would you like us to do for you? About 35% to 40% of patients are choosing to do it themselves. If they choose to do it themselves, we don't have a product that can compete in that marketplace today. So we're not talking about some sort of brand extension. This is literally new almost -- you can almost view it as a new indication of this group of patients that we currently don't have access to. So that's why it's so important. So that's why I say sometimes this could nearly double our addressable market.

So maybe you could now like review the data that you did share from the Phase I in bioavailability data and speak to how that then could translate as we look to see the results later this year?

Yes. So the data that we presented was bioavailability information and data from our Phase I study. The simple portion is that the -- takes a lot of data to get an answer. But the answer is that it's about 60% bioavailable. So when you -- even into the subcutaneous compartment, about 60% of that material will make it into the vein. So when you -- all you have to do, I make it sound very simple and took a lot of work on the team. But in essence, all you really have to do is come up with -- put enough material in then when you lose 40% of it, 60% makes it into the blood, and that is an equivalent amount to what you're giving IV. So it doesn't have to be complicated. And if you do that, and we're giving -- just to put it in the numbers. I mean, we're giving our quarterly regimen is 400 milligrams on day 1, 400 milligrams on day 15, 400 milligrams on day 3 months, whatever, right? So that's 1,200 milligrams given in the first 6 months, we're looking at the AUC 0 to 24 weeks or the first 6 months, that is the same -- that is to match off against our IV dose of 150 milligrams on day 1 or 50 or 600 total milligrams, 1,200 times 0.6 720 divided by 600 comes up at 1.2. We have very fancy models that came out with 1.21. I mean it's almost hard not to if you put it in, it's hard not to get an AUC that matches, if you know the bioavailability. So that's where we are. The study is designed -- the Phase III study is designed to look primarily at noninferiority, which means that you have to have instead of what I calculate as a 1.2, you have to be above 0.8, right? So for us to see bioavailability drops so low as to see 1.2 turn it to 0.8, you'd really be based on the confidence intervals around the information we have today, you'd really be in a tail, if you think of a normal distribution curve, you're way out on the tail. If that were to happen, which we think is highly unlikely, we still have the every other month, which would shift from 1.58 would go straight on down and would land directly in the profile. So between the 2, we've got a lot of safety margin. We think we have a ton of safety margin, obviously, around the quarterly.

Just to confirm, once you get pass the loading dose math kind of like any changes the way that math works.

No. You get 400 milligrams every 3 months. And again, in the second half of the year, just to give you a sense, we've got 400 milligrams, 400 milligrams matching up against 450 milligrams. We have 800 to 450 times 0.6. -- you're going to land in a very nice location across the board.

And in terms of like form factor and tolerability, what can you share about the amount of volume that you're administering with this subcutaneous what you saw from a tolerability perspective in that data?

Yes. So we're using a 2 mL injection fits nicely into an auto-injector. The first study that we reported is from clinician injecting the 2 mLs where we said that we'll be doing a bridging study, which should start relatively soon to bridge from the injection, the 2 mL injection by a clinician to an auto-injector injection. So 2 mL is a good number there. And then in terms of the tolerability, I think we saw 2 injection-related reactions which were mild to moderate. -- can't remember what we said in the report. But it's pretty minor. I mean, we did think about 225 injections, over 80% of them were at the 2 mL volume. So not a lot of injection site reactions. And then the systemic injection reactions and more like IRRs was also like 20%, which is actually really consistent with what we saw in enhance for both arms essentially at about 20% infusion reaction.

Can you frame this versus the competitive landscape? You mentioned already that 35% of patients are getting subcu today. How do you think every 12-week kind of dose would fit relative to the competitive set?

We think it will be really well received. The current competitor is at 1 injection per month, the 12 injections per year. This would take the injections down to 4 per year. We think in our research, 4 versus 12, there's a pretty stark market share benefit to us. The competitor is working on in every other month product. We still think less is always going to be better. And we haven't even started the process of comparing libituximab itself versus ofatumumab, right? So we spend a lot of time because we compete against ocrelizumab. We spent a lot of time differentiating the molecules, We've spent almost no time because we don't compete today against ofatumumab, right? So once we start to showcase some of those differences, and it's quite interesting, too, because while OEVs is a little bit -- I'm going to call it dirty, it's not really dirty, but it has dual -- really has a pretty balanced mechanism between ADC and CDC. Ofatumumab has been engineered specifically to have high levels of CDC and almost very low levels of ADCC, whereas we were engineered the exact opposite to have really high levels of ADCC and very little level of CDC. And I think once we start to engage with clinicians on the differentiation between the molecules, I think that plus the convenience factor puts us in a great position to do what we believe we can do and what we want to do is to be the #1 subcu marketplace. We want to be #1 overall CD20. We're on our way on the IV side, and we're looking forward to hopefully being very disruptive in the subcu side.

Helpful. And so then as you think about where the subcutaneous market could go relative to the CD20 class, I guess, how do you think introducing a 12-week could change sort of the share from a broader cost perspective?

It is hard to know. We do think there are dynamics that over time may push more of the market out of the infusion suite and into the home. There have been and continue to be site of care issues with academic centers. You'd be -- I think you can be shocked to know that in some or many academic centers, the charge for the infusion service itself exceeds the price of the drug, process that for a second -- if you will. So in those cases, you will see that the insurance companies will push outside of those centers. Now a lot of times, they'll end up at an AIC and independent infusion center, but a lot of times, that will just -- the clinician may at that point, use a subcu product. So the more and more that the insurance companies push the site of care issues the more you'll see drop off into subcus or fall off into so.

How should we think about pricing for the subcutaneous product relative to the IV? -- kind of with that in mind, there's a different kind of cost dynamic, et cetera.

Yes. So I guess the first thing to notice is that with the bioavailability being different, just on a milligram per milligram basis, we're using, I can say, almost double because the map on 60%, but it's 40%, whatever that inverse relationship is. But we're using a significantly more material. So on a milligram per milligram basis. And that market is different, ofatumumab is priced at a very different price point than the IV and there's different rebate programs. So we're going to have to review the pricing in the context of the marketplace that we're going into, but also based on the milligrams that will be delivered.

One of the things that you did when you came into the IV market was compete with OCREVUS on price. Is that something that you think you would need to do here in the sub setting, particularly given the differentiation we talked about on the clinical side?

I think we're still evaluating. One thing that the team did do successfully, you're alluding to is we did take price against ocrelizumab and I'd like to say it was some that was targeted at ocrelizumab, but really it was targeted to the payers, right? And the idea was we wanted to get -- I want to call it great coverage as early as possible, right? One of the hardest things is at the time of launch, if you get clinicians excited and they can't use the compound you kind of lose them, right? And it takes them a little while to come back and they have a recollection of the challenge that they had -- and so even to this day, there's some clinicians who maybe start early, and we'll talk to them and say, yes, it's harder to get to him, like, no, no, no. That was the first 3 months. We're 3.5 years in across pretty much have parity with ocrelizumab. There are some places where we do have priority. But overall, we have parity and that was the team's goal. The team did a lot of research, and they believe that coming in at the lower price would get us early access. They were successful. I think within 6 months of launch, we were at 80% coverage. And within a year, we were over 90%.

And you have the best patent data across the CD20 therapies with duration into the 40s. But as these biosimilar products come to market for the other agents in the category, I guess, what do you expect to see in terms of how that changes cost share dynamics?

Yes. I've often said tongue in cheek that as you know, our goal is to be the #1 anti-CD20 in the marketplace. And if we don't get there before ocrelizumab goes biosimilar, we'll certainly be thereafter, right? So I think that in a tongue-in-cheek way of me saying, we firmly believe that a tailwind will be ocrelizumab biosimilar to us. generally speaking, in this marketplace, prescribers prefer not to use generics or biosimilars. We're starting to see this dynamic emerge with DeSabry today. We see a lot of switches from TYSABRI for clinicians who are being forced to go on to the biosimilar. We anticipate something very similar, will occur. And in terms of pricing, we're already at about a 25% discount to the price of eculizumab. Most biosimilars don't even come in that low. So there's not a huge economic incentive for them to go across category to step through for us. There is a lot of incentive for them to get as many patients off of ocrelizumab and on to biosimilar as they can immediately save [indiscernible] whatever the biosimilar comes in on pricing. But to go across [indiscernible] an economic incentive from price and also you're talking about a franchise that we'll have in place that they'd be giving up a lot in volume, our volume and our price to go to something else.

Great. Maybe you could speak a little bit on the OpEx side. I guess in terms of near term, any additional investments you feel the need to make either on the DTC side or in terms of commercial infrastructure and then how should we think about that as you look forward in bringing a subcutaneous product to market over the next couple of years?

Yes. So just in terms of where we are today, we launched with a, I'd say, relatively modest commercial team, but mighty. We hired really some of the best people in the business, but relatively small in comparison with the plan that we'd continually grow out that as the demand required, we would continue to rise to the occasion. We've continued to do so. So we've built our team. I think our commercial team is in a great place right now. We continue to look for opportunities to optimize certain, whether it's geographies or even down to places, right? So if we see that we're doing great in one city, but one center isn't performing because we don't have connectivity there. If we could find someone who has connectivity, we'll go ahead and hire that person. We can overlap from a geography standpoint. But for the most part, we've got a field team that's operating at a high level. And like I said, I think if we see the opportunity to improve, we'll continue to add people. So that's the field force. And so it continues to grow modestly on a year-over-year basis. The big toggle is DTC, right? That's something that you could spend like our competitors, $100 million plus or like us something in probably the $25 million to $50 million range, right? So we could toggle that up at any point that we want to. And we do -- we toggle up and down as we see things and opportunities, and we continue to experiment. I mean we don't think that it has been figured out yet what the optimal across the whole industry. I mean the pharma companies, their simple model is just grow the spet against the wall and see what sticks. And for the most part, they're going to get an ROI above 1, right? So it's not going to be 0. They're going to get ROI, but we're not playing for a 1% ROI. ROI is dramatically higher. So we'll continue to look for opportunities to continue to build that out. And so that is the big OpEx toggle. You could spend a lot or you could toggle back down. And as we see opportunities where we see things that are working, we'll lean into them. So that's where we are on the DTC. And then you asked about how does that change as we move into subcu. So from a field force perspective, subcu is really overlapping with what we're doing today, right? We have -- I think we've calculated that probably 80% -- we're covering about 80% of the subcu prescribers with our current field force. So really highly -- from an operational leverage perspective, I mean this is and different -- even different from MG, which is pretty darn good. We've got a lot of overlap there. But it's not like going into a whole another area, you have to rebuild the entire machine. This is very incremental OpEx on top of a full almost equivalent opportunity set. So that -- but then DTC, again, is a toggle, right? It's how much do we want to do to promote and what makes the most sense. So there'll be -- that will be incremental, but it will be somewhat probably substituting, right? Because the brand is the brand, right? We'll be the only ones who have both products in the marketplace. So even as we're DTCing the subcu, we're selling the IV, right? If patient comes in and is asking about BRIUvi, they're still asking about BRIUvi. And the clinician is going to direct them in the preference that they want.

So with that in mind, you're looking at relatively significant operating leverage and cash flow generation over the intermediate term. I guess how do you think then about allocating that capital across shareholder returns, business development, investing in the pipeline?

Yes. It's the way easy answer is all of the above. So I'm not going to say that, although I just did. Yes, I mean we've been -- I mean, I think of companies our size, we've been very quick to start with the repurchase program, right? We recognize that we are going to be generating significant cash flow over the coming years and buying our shares inexpensively where they sit today versus waiting to buy them in a few years at much higher prices, we thought was a good idea, and we leveraged up to do that. Having said that, we still have -- through that leverage, we have enough bandwidth to look for new opportunities, which we continue to do and, of course, invest in the pipeline. So -- and what we have in front of us. So we don't feel at all restricted by cash. We feel like we have access to unlimited cash to do whatever part we want. So if we see a business development opportunity that is a great deal, and we think we can generate a high level of IRR, we will do that. If not, we know that we have a high level of IRR embedded in our repurchases. We'll continue to do that. But yes, I think we're poised to use that cash flow judiciously, cautiously. And again, we've been talking about doing BD deals for a very long time. We've executed one in Azer-cel, which I haven't talked about. So we talk a lot, we review everything. There's not one deal that's been signed that's close to MS over the last few years that we didn't -- we weren't probably the -- we were the preferred partner, and we chose not to do it.

Well with that, I think we're out of time. Thanks again for joining us. Appreciate it.