TG Therapeutics, Inc. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. Amounts below are in millions of dollars unless noted. The company is a biopharmaceutical developer focused on B-cell diseases.
Financial performance and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Total revenue | $0.594 | $1.545 | $2.610 | $2.338 |
| Operating loss | $(38.941) | $(77.492) | $(105.813) | $(166.694) |
| Net loss | $(40.510) | $(78.497) | $(109.523) | $(169.125) |
| Net loss per share | $(0.30) | $(0.59) | $(0.81) | $(1.28) |
- Revenue: Q2 product revenue was $0.556 million, down from $1.507 million; six-month product revenue was $2.534 million, versus $2.262 million. License revenue was $0.038 million in each quarter and $0.076 million in each six-month period.
- Cash flow: Operating cash used was $117.8 million for the first half, compared with $141.5 million a year earlier. Investing cash used was $33.3 million, primarily reflecting purchases of investment securities; financing cash used was $0.7 million. Cash, cash equivalents and restricted cash declined $151.8 million to $148.3 million.
- Liquidity: At June 30, cash and cash equivalents were $147.1 million, with $84.7 million of investment securities; management reported $231.8 million in cash, cash equivalents and investment securities and expected these resources to fund operations for more than 12 months from the filing date.
- Debt and liabilities: The Hercules loan had $70.0 million principal outstanding and a $68.9 million balance-sheet carrying value, net of unamortized issuance costs. Total liabilities were $122.6 million. The loan matures January 2026; cash interest is the greater of prime plus 2.15% or 5.40%, plus 3.45% paid-in-kind interest. Financial covenants begin October 2022.
- Margins: The filing does not present a company-wide gross margin measure. Cost of product revenue was $0.023 million in Q2 and $0.260 million for the first half.
Material changes versus the prior comparable period
- Q2 and first-half net losses narrowed substantially year over year, alongside lower research and development and selling, general and administrative expenses. Management attributed expense reductions to lower license milestones and clinical-trial costs, reduced UKONIQ marketing, and lower headcount.
- Reported stock-based compensation was unusually low: Q2 SG&A included a negative $3.3 million noncash compensation amount, attributed to forfeitures following headcount reductions. First-half SG&A noncash compensation was also negative $3.1 million. This contributed to the lower reported losses.
- First-half manufacturing expense included a one-time charge for advanced UKONIQ clinical and commercial batch payments following its market withdrawal.
- Interest expense increased to $3.0 million in Q2 and $5.7 million for the first half, mainly due to the amended Hercules loan. First-half other income increased to $2.0 million, primarily from an Australian R&D tax credit refund.
Outlook, management commentary, risks and unusual items
- UKONIQ (umbralisib) was voluntarily withdrawn from sale in April; the FDA withdrawal of its approval became effective May 31, 2022. The FDA also issued a partial clinical hold on certain UKONIQ/ublituximab oncology trials. The company withdrew its pending U2 (ublituximab plus umbralisib) applications for CLL/SLL after updated overall-survival data showed an increasing imbalance favoring the control arm. Management was reassessing oncology programs and had paused or closed some trials.
- The company had no marketed products after the UKONIQ withdrawal. It expected no further UKONIQ sales revenue, apart from potentially immaterial adjustments as accrued liabilities are settled.
- Ublituximab’s RMS BLA remained under FDA review. The FDA extended the PDUFA goal date to December 28, 2022, to review a company submission deemed a major amendment. The filing does not report an approval or guarantee an outcome. Other listed clinical-stage programs included cosibelimab/TG-1501, TG-1701 and TG-1801, all in Phase 1.
- Management expected continued operating losses and significant R&D, manufacturing and potential commercialization spending. It stated that additional financing would be needed for long-term operations, and that future financing may not be available on acceptable terms. Risks include regulatory delay or rejection, clinical and manufacturing uncertainty, competition, and dependence on third parties and single-source suppliers.
- A putative securities class action was filed in July 2022 against the company and two officers, alleging materially false or misleading statements concerning ublituximab and umbralisib. The case was in its early stages; the company said it intended to contest the claims.
- Management reported effective disclosure controls as of June 30, 2022, with no material change in internal control over financial reporting during the quarter.
Most important facts for investors to verify
- Progress and FDA decision on the RMS BLA, including the December 28, 2022 goal date and any further requests or delays.
- Updated safety and overall-survival findings from UNITY-CLL, the status of the partial clinical hold, and the resulting scope of oncology development.
- Actual cash use, available liquidity and financing needs against management’s greater-than-12-month runway estimate; also monitor Hercules covenants and debt service.
- Whether commercial manufacturing commitments, including minimum-purchase obligations, and planned launch spending change materially.
- Developments in the securities class action and any related contingent exposure; the filing does not provide a clear estimate of potential loss.